Salute Friend

One of the most popular questions we receive from clients is “do I qualify to file a ch 7 bankruptcy?” While the bankruptcy laws are thought to be accessible to everyone, they can be confusing, and the recent bankruptcy laws have changed how courts determine if someone is entitled to file for ch 7 and ch 13 bankruptcy. Curious if you qualify for ch 7?

Individual - Only individuals can file a chapter 7 bankruptcy. 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 - 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. 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 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 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 your leftover income is between $6000-$10,000 then you have to determine if you can pay at least 25% of your unsecured debt, if you can’t then you can file ch7. As you can see, the means test is confusing if you have disposable income because your income is higher than the median, so you should discuss your eligibility with 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.