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The stress of being in debt can be overwhelming. You may have creditors calling all day, and you may be experiencing sleepless nights or constant anxiety thanks to debt that is spiraling out of control. It’s a stressful time, and it’s often accompanied by a job loss or disability, but many are too proud to consider a bankruptcy because of the stigma of “failure” that’s often attached to it. The truth is, bankruptcy is a means to get a fresh financial start and relieve the stress of financial pressures.

If you do decide to file for bankruptcy, you probably have a number of questions about how it works. Except for a few exceptions for business owners and military veterans, you will probably need to take the bankruptcy means test to determine if you are eligible for Chapter 7 bankruptcy. In the past, courts had more flexibility to decide bankruptcies on a case by case basis, but the Bankruptcy Protection Act of 2005 standardized most of the criteria. Now, it’s mostly based on the debtor’s last six months of income before filing.

Income can be any of the following:

  • Salary, wages, bonuses, tips and commissions.
  • Business income.
  • Interest, royalties and dividends.
  • Retirement monies and pension income.
  • Workers’ compensation.
  • Unemployment compensation.
  • Rental income.
  • Annuity payments.
  • Disability insurance from the state.

It does not count things like Social Security benefits, tax refunds or public assistance.

Even if you don’t meet the requirements, you may still have special circumstances that will allow you to file. An attorney can take a look at your financial situation and may be able to help you get relief from your debts and start your financial life again.