Greenville, SC Chapter 7 Bankruptcy Lawyer

Does Your Greenville Income Qualify for Chapter 7?

Chapter 7 bankruptcy can be a lifeline for many people in Greenville, South Carolina. It can eliminate many types of unsecured debt, but eligibility is not determined by income alone. For individual filers with primarily consumer debts, the means test begins by comparing current monthly income with the applicable South Carolina median for a household of the same size. Being below the median generally satisfies that part of the test, while being above it does not automatically make someone ineligible.

If income is above the applicable median, the calculation continues using deductions and expense standards allowed under federal bankruptcy law to determine whether a presumption of abuse arises. Because current monthly income is based on a defined lookback period, changes in overtime or other variable income can affect the calculation.

At Benjamin R. Matthews and Associates, LLC, our Greenville Chapter 7 lawyers run that calculation for every client. If Chapter 7 isn't the right fit, we'll talk through Chapter 13 instead. Either way, you'll leave knowing which option gives your Greenville household the best path to a fresh start.

The Means Test: South Carolina's Gatekeeper for Chapter 7

The Chapter 7 means test begins by comparing your household income to South Carolina's median income for a household your size, using the statewide figure rather than a county-by-county number. If your income runs above that median, the analysis continues using deductions and expense standards set under federal bankruptcy law, not a simple local cost-of-living adjustment. It's a calculation best left to an attorney, not a back-of-the-envelope estimate.

What Debts Does Chapter 7 Actually Eliminate?

If you qualify, Chapter 7 bankruptcy, sometimes called liquidation bankruptcy, can wipe out most:

• Credit card balances
• Medical bills
• Personal loans and most other unsecured debt
• Old utility bills sent to collections

What Chapter 7 generally does not eliminate includes most student loans, recent tax obligations and child support or alimony. Sorting your own debts into those two groups tells you a lot about whether Chapter 7 will solve the problem.

Will I Lose My House or My Car in Greenville?

Often, debtors can protect some or all of the equity in a home or vehicle through South Carolina's bankruptcy exemptions. But exemptions protect equity, not the lender's lien. Whether you can keep financed property also depends on the loan, your payment status, and how the secured debt is handled in the bankruptcy case. Go over those details with an attorney before you file.

What Is a Reaffirmation Agreement?

A reaffirmation agreement is an agreement in a Chapter 7 case that keeps you personally liable for a debt that would otherwise be dischargeable, often so you can retain property securing the loan, such as a vehicle. Federal bankruptcy law imposes specific requirements and deadlines for dealing with secured personal property, and options may include reaffirming the debt, redeeming the property or surrendering it. A reaffirmation agreement has long-term consequences because the debt remains enforceable after discharge, so talk with your attorney before signing one.

What Happens at the 341 Creditors' Meeting?

About a month after filing, Greenville Chapter 7 filers attend a required meeting of creditors, known as a section 341 meeting, conducted by a bankruptcy trustee rather than a judge. Despite the name, creditors rarely show up in person, and the U.S. Trustee Program notes that nearly all of these meetings are now conducted virtually. The trustee asks a series of routine questions confirming the accuracy of your paperwork, your identity, and your understanding of the process. With an attorney beside you, you won't face those questions alone.

Can I File Chapter 7 If I Own a Small Business?

Owning a small business does not automatically prevent an individual from filing Chapter 7. But business assets and any business debt you've personally guaranteed both factor into your filing. Sole proprietors in particular often file personal and business debt together in a single case, since there's no separate legal identity between the owner and an unincorporated business.

What If I Have Recent Large Purchases or Cash Advances?

Bankruptcy law includes specific rules around debt incurred shortly before filing, particularly luxury purchases or cash advances taken out in the months right before a Chapter 7 case. Certain recent charges can be presumed non-dischargeable if they fit specific patterns the law is designed to catch. Be upfront with your attorney about big recent purchases or cash advances. Failing to disclose recent purchases or cash advances can create serious problems, including additional scrutiny and disputes over whether particular debts are dischargeable.

How Are Joint Debts With a Non-Filing Spouse Handled?

If you file individually while your spouse does not, your discharge generally affects only your personal liability. A spouse or other co-borrower who is also legally obligated on the debt may remain responsible for the full unpaid obligation, depending on the underlying contract. Review all jointly held debts before deciding whether one spouse or both should file.

What Happens Right After I File Chapter 7?

Once your petition is filed, the automatic stay takes effect and most collection activity has to stop. The trustee then reviews your paperwork, and about a month later you'll attend the section 341 meeting. Before your discharge can be entered, you'll also need to finish a second course in debtor education.

How Does Filing Affect a Co-Signed Student Loan?

If a parent or family member co-signed a student loan, your bankruptcy discharge does not automatically eliminate the co-signer's obligation. Most federal student loans and certain qualifying private education loans are not discharged unless the debtor establishes the required basis for discharge, such as undue hardship. Whether a particular private loan falls within those rules depends on the loan itself.

Documents You'll Need to File

Missing paperwork is one of the most common reasons a Chapter 7 case stalls. Here's a quick checklist of what we ask Greenville clients to gather early. If anything's unclear, just ask.

• Six months of pay stubs from your current job
• Your last two federal tax returns
• A complete list of every creditor you owe
• Recent statements for checking, savings and retirement accounts
• Titles for any vehicles, plus a mortgage statement if you own a home

Gathering these before your first meeting helps us calculate your means test accurately and avoid delays once your case is filed.

See Whether Chapter 7 Is Right for You in Greenville

Benjamin R. Matthews and Associates, LLC can run your means test, prepare every required form and represent you at the United States Bankruptcy Court, District of South Carolina Greenville Division, where local Chapter 7 and Chapter 13 filings are heard. Start with a free initial consultation to find out whether Chapter 7 fits your situation.