Chapter 7: Liquidation Bankruptcy

Bankruptcy Chapter 7 allows individuals to discharge up to $394,725 in unsecured debts and restructure secured debts.

Chapter 13: Reorganization Bankruptcy

Bankruptcy Chapter 13 allows individuals with a steady income to create a repayment plan for debts and restructure non-dischargeable debts.

The Means Test: Assessing Income-to-Disposable-Income Ratio

The means test is a calculation of an individual's income divided by their disposable income (income minus necessary expenses). The result determines eligibility for Chapter 7 and Chapter 13 bankruptcy.