Qualifying for Chapter Seven Bankruptcy
The inquiry we get the most from people is “do I qualify for chapter 7 bankruptcy?” The new bankruptcy laws have adjusted who is eligible to file personal bankruptcy to prevent people from taking advantage of the system. So, do you qualify for ch 7 bankruptcy?
Individual - You must be an individual to file ch 7. You can be single or married. If you are married you may file with or without your spouse. Your spouse’s income will have to be considered even if you are not filing together in order to see if you qualify for chapter 7.
Income - Under the new bankruptcy laws chapter 7 filers must submit a bankruptcy means test which checks if you have the means, enough spendable income, to pay at least a portion of your debts. Your income is compared to the state median for a family of your size, if it’s below the median then you qualify for chapter 7.
You can still qualify for chapter 7 if your income is higher than the median in your state by showing your living expenses. The means test will then compare your living expenses to the IRS standard allowances that have been set for where you live. If you have other expenses that are needed to live such as special medical needs, these can also be included to lower your disposable income.
You can file ch 7 if you have less than $6000 in disposable income, but if you have over $10,000 you cannot file and may be forced into a chapter 13 if you try. 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. You should discuss your options with an attorney if you make more than the median income as the means test is confusing.
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.
