Qualifying for Chapter Seven Bankruptcy
One of the most popular questions we get from clients is “do I qualify to file a ch 7 bankruptcy?” Bankruptcy courts and laws can be confusing to someone who hasn’t been through the process, especially discovering eligibility thanks to the new bankruptcy laws. Let’s look at who can file a chapter 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. 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. The IRS has furnished standard allowances for things like housing, groceries, and other necessary expenses. 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 you are left with over $10,000 in disposable income you cannot file a chapter 7 bankruptcy, but if it’s less than $6000 you qualify. 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 bankruptcy information for chapter 7 and 13, and DoItYourselfBankruptcyForms.com where you can find free bankruptcy forms online.
