Do You Qualify for Chapter Seven Bankruptcy?
The inquiry we get the most from people is “do I qualify for chapter 7 bankruptcy?” While the bankruptcy laws are thought to be accessible to everyone, they can be perplexing, and the new bankruptcy laws have changed how courts determine if someone is entitled to file for ch 7 and ch 13 bankruptcy. So, do you qualify for ch 7 bankruptcy?
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.
You can provide your living expenses to qualify if your income is above the median. Your living expenses will then be equated to standard allowances the IRS has ordered for housing, groceries and other normal expenses. If you have other expenses that are necessary 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 your income is inbetween those limits and you can’t afford to pay at least 25% of your total unsecured debt, then you can file chapter 7, but if you can afford to pay it, then you do not qualify. You should talk about your choices 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 personal bankruptcy information, and DoItYourselfBankruptcyForms.com where you can find free bankruptcy forms online.
