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DO I QUALIFY FOR BANKRUPTCY?
Congress in 2005 created a complicated test, called the MEANS Test to determine if you qualify for a Chapter 7 Bankruptcy which is also known as a Liquidation Bankruptcy or Straight Bankruptcy.
You must discuss your individual situation to determine if you qualify or not. However, in my experience, ALMOST EVERYONE WILL QUALIFY.
If you pay money on a regular basis to a charitable organization such as the March of Dimes, Father Joe's Homeless Shelters, your church, you are allowed to continue to make those payments and still pass the MEANS Test.
Should you decide to aim for a Chapter 13 Bankruptcy with a Payment Plan, also known as a Debt Consolidation Bankruptcy, in order to Strip your 2nd Mortgage or HELOC off of your home, you must pass a qualification test there too.
Called Feasibility, what it boils down to, is if you can make your regular mortgage payments on your 1st Mortgage, and make the monthly Chapter 13 Bankruptcy Plan Payment too, then you qualify. It's simple really.
