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?” Bankruptcy courts and laws can be confusing to someone who hasn’t been through the process, especially determining eligibility thanks to the new bankruptcy laws. So, do you qualify for ch 7 bankruptcy?
Individual – In order to file ch 7, you have to be an individual, businesses are not eligible. You can be single or married. If you are married you can file with or without your spouse. 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 – The chapter 7 means test will see if you have expendable income accessible to pay some or all of your debts. You are eligible for a chapter 7 if your income is lower than the state median for a family of your size.
You can provide your living expenses to qualify if your income is above the median. The means test will then compare your living expenses to the IRS standard allowances that have been set for where you live. 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 your disposable income is lower 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. 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 bankruptcy information for chapter 7 and 13, and DoItYourselfBankruptcyForms.com where you can find free bankruptcy forms online.
