Eligibility is a major concern while one thinks of filing for insolvency. There are two chapters of insolvency; chapter 7 and 13. According to stats filing chapter 13 is easier than chapter 7. Insolvency cannot be handled by any one and a professional bankruptcy lawyer is needed to be hired.
The facts clearly report that chapter 7 is more filed than chapter 13 and to be approximate; chapter 7 is filed three times more than chapter 13. This is because with the help of chapter 7 you can easily wipe off huge amounts of loans in one going; without paying a penny back to your lender. The lender ends up making a huge loss.
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Let's take an example of person who is earning within the range of minimum income determined by the government and has a loan amount of $60,000. This person is easily eligible for chapter 7. The case is that; the person earning higher than the minimum wage level of a state does not qualify and the person earning below or under the minimum wage limit easily qualifies. For example you earn $50,000 and the minimum wage level is $25,000 then you cannot go for 7 and you have to go for 13.
The government is trying to control all the mess created by insolvency chapter 7 and they are trying to discourage people from filing insolvency at all. This is why there are two chapters; so if a person who can repay the entire liability amount is not allowed to exercise chapter 7. Many people who use to earn well and reimburse the loan borrowed loan amount even started to file for chapter 7 as they did not want to pay at all.
According to requirements; those people qualify for chapter 13 who have earned more than the minimum income level of the state they are living in over the past 6 months tenure. Even if you try to file under chapter 7; you will be forced to file under 13 or you will not be allowed to file at all. People who have acquire loan amount crossing the limit of $360, 475 as unsecured and $1,091,400 as secured loan are not allowed to choose chapter 7 and are not eligible even. Unsecured debts are provided without any collateral and secured debts are provided on the conditions of collateral. Filing insolvency has created problems in past and is still proving to be a threat to the economy of America; it is better to go for other option to gain debt relief aid.
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