Qualifying for Chapter Seven Bankruptcy
One of the most popular questions we receive from clients is “do I qualify to file a ch 7 bankruptcy?” The new bankruptcy laws have adjusted who is eligible to file personal bankruptcy to keep people from taking advantage of the system. Curious if you qualify for ch 7?
Individual – You must be an individual to file ch 7. You can be married or single. You can file with your spouse or without them. If you file without your spouse you will still have to disclose their income in order to determine if you are eligible to file chapter 7.
Income – Chapter 7 filers must complete a means test that takes your income and expenses into account to determine if you are able to pay a portion of your debt. If your income is below the state median for your family size, as determined by the bankruptcy guidelines then you are eligible for ch 7.
If your income is above the median you may still qualify for ch 7 by providing additional information on your expenses to determine your disposable income. The means test will then compare your living expenses to the IRS standard allowances that have been set for where you live. You may also be able to include extraordinary expenses you may have due to medical and other conditions that will have to be explained to the bankruptcy court.
If your disposable income is lower than $6000 you qualify for ch 7, if it’s more than $10,000 you do not qualify for chapter 7 bankruptcy. If it’s between $6000-10,000 and you can pay at least 25% of your unsecured debt then you do not qualify for ch 7, if you cannot pay at least 25% then you can file chapter 7 bankruptcy. The new means test can be complicated if you make more than the median income, so it’s important to consult a bankruptcy attorney.
Guest Article Provided By: BankruptcyFormProcessing.com where you can find information on filing bankruptcy, and DoItYourselfBankruptcyForms.com where you can find free bankruptcy forms online.
