If life has thrown some financial curve balls at you, you’re definitely not alone in your struggle. Many Tennessee residents are currently trying to overcome serious crises that have left them in need of immediate debt relief. Perhaps you unexpectedly became unemployed and are having a tough time making ends meet between jobs. Maybe you incurred other debts you were not prepared to meet.

Often, a key to start overcoming financial trouble lies in knowing what types of options are available. You might be eligible for bankruptcy. There are several types, and there are qualifications you must satisfy to apply for each type. It’s possible to be eligible for one kind of debt relief program but not another. If you hope to file for Chapter 7 bankruptcy, you’ll have to take a means test first.

What is a means test?

The following list includes basic facts and information about the Chapter 7 means test that helps determine if a specific person is eligible for application: 

  • Chapter 7 bankruptcy typically involves complete liquidation of assets. After selling your assets, the money is used to pay back your lenders to satisfy all debt. 
  • To determine if you can file a Chapter 7 petition, factors such as your family size, your income and expenses come into play.
  • A means test is a way to compare your current income with the average household income in Tennessee.
  • If your income is at or below the average level in the state, you might be able to petition the court for Chapter 7 bankruptcy.
  • Even if you earn too much income to pass a means test, it doesn’t necessarily mean there are no bankruptcy debt relief options available to you.
  • Many people refer to another type of bankruptcy as the “working man’s debt relief” because it is meant for people who have a reliable, consistent form of income and are able to keep making payments toward their debt. Lenders typically agree to alternate payment plans to make a system more feasible until the debtor can restore his or her financial stability.

You might try other ways to overcome financial trouble in your life, such as cutting back on unnecessary spending. For instance, you might not actually “need” to eat out three times a month, or perhaps, you might decide it’s time to kick your smoking habit to save money. While implementing such ideas might create cash flow or help you pay a few bills, such options may not be enough to secure debt relief if things have gotten further out of hand.

Never hesitate to seek support

The good news is that most financial problems are temporary. It might take some creative thinking and patience to fully resolve a particular crisis, but that doesn’t necessarily mean it’s impossible. Some people hesitate to seek information about bankruptcy because of the negative social stigma attached to it. Others, however, have learned that bankruptcy is often a way to obtain immediate debt relief and lay the groundwork for a stronger financial future.