June
2009
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?” While the bankruptcy laws are supposed to be accessible to everyone, they can be confusing, and the new bankruptcy laws have changed how courts determine if someone is entitled to file for ch 7 and ch 13 bankruptcy. Let’s look at who can file a chapter 7 bankruptcy?
Individual – Only individuals can file a chapter 7 bankruptcy. You can be married or single. 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 checks if you have the means, enough spendable income, to pay at least a portion of your debts. You are eligible for a chapter 7 if your income is below the state median for a family of your size.
If your income is above the median you may still qualify for ch 7 by providing supplemental information on your expenses to determine your disposable income. Your living expenses will then be compared to standard allowances the IRS has ordered for housing, groceries and other normal expenses. Extraordinary expenses may also be included such as medical needs or special diets for health issues.
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 information on filing bankruptcy, and DoItYourselfBankruptcyForms.com where you can find free bankruptcy forms online.
