Chapter 7s are used to eliminate unsecured debt: credit cards, medical bills, personal loans, mortgage deficiencies, car repossession deficiencies etc. The process is quick, and the relief is dramatic. The means test determines whether you qualify for Chapter 7 relief or not.
The means test is broken down into two parts. If you are below the median income for NC, you qualify. If you are not below the median, the court will look to what expenses you have each month to determine whether you qualify.
Do you have large medical bills (co-pays for prescription drugs do count) which insurance does not cover? Do you take care of an elderly loved one? Do you have kids in school? In all of these situations, the court allows expense deductions which may allow you to qualify for Chapter 7 debt relief.
An experienced bankruptcy attorney can recommend a strategy to get you back on your feet and moving in the right direction. For some above-median debtors, qualifying for a Chapter 7 is the right way to go. For others, dramatically reducing payments in a Chapter 13 would be more beneficial.
For those of you in Western North Carolina, I would be pleased to recommend a course of action for you and your family during a free, initial consultation.