Can You File Chapter Seven Bankruptcy?
The first question clients usually ask is if they are eligible to file a chapter 7 bankruptcy. The new bankruptcy laws have adjusted who is eligible to file personal bankruptcy to keep people from taking advantage of the system. Curious if you qualify for ch 7?
Individual - In order to file ch 7, you have to be an individual, businesses are not eligible. You can be married or single. If you are married you may file with or without your spouse. If you are married and filing alone you will have to include your spouse’s income to be considered for your eligibility to file.
Income - The chapter 7 means test will determine 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 under the state median for a family of your size.
You can provide your living expenses to qualify if your income is above the median. Your living expenses will then be compared to standard allowances the IRS has set for housing, groceries and other normal 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. You should talk about your options 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.
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