Can You File 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 modified 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 single or married. 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 – Under the new bankruptcy laws chapter 7 filers must submit a bankruptcy means test which determines if you have the means, enough disposable income, to pay at least a portion of your debts. If your income is below the state median for your family size, as established by the bankruptcy guidelines then you are eligible for ch 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.
If your disposable income is less 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. You should discuss 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 bankruptcy information for chapter 7 and 13, and DoItYourselfBankruptcyForms.com where you can find free bankruptcy forms online.
