Chapter 7 Bankruptcy: A tough nut to crack
If you though that owning a lot of debt that can't be repaid was the most important criteria for filling under chapter 7 bankruptcy, then better rethink. The parameters for a chapter 7 bankruptcy code became more stringent as a result of the 2005 ruling of the congress. Many attribute this ruling for the overhaul of the bankruptcy code.
In order to qualify for a chapter 7 bankruptcy filling, a person's income must be at or below the median income of the family. This of course depends on the size of the family and guidelines vary from state to state.
However, the business debt exception clause is very helpful to people filling under the chapter 7 bankruptcy. Under the business debt exception, if more that 50% of an individual's debts are related to his business, then he/she automatically qualifies for the chapter 7 bankruptcy.