Made Moon Blog

One of the most popular questions we get 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 prevent people from taking advantage of the system. 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. If you are married you can file with or without your spouse. 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 – The chapter 7 means test will check if you have disposable income available to pay some or all of your debts. 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 still qualify for chapter 7 if your income is higher than the median in your state by showing your living expenses. Your living expenses will then be compared to standard allowances the IRS has set for housing, groceries and other normal expenses. 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.

You can file ch 7 if you have less than $6000 in disposable income, but if you have over $10,000 you cannot file and may be forced into a chapter 13 if you try. If your income is inbetween those limits and you can’t afford to pay at least 25% of your total unsecured debt, then you can file chapter 7, but if you can afford to pay it, then you do not qualify. 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 chapter 7 bankruptcy information, and DoItYourselfBankruptcyForms.com where you can find free bankruptcy forms online.