Do I Qualify For Chapter 7?

When you’re caught in the middle of debt struggles, you can feel like you’re all alone. But the bankruptcy statistics from the recent years has shown the annual personal bankruptcy filings to be over 1.5 million per year. So stop stressing about it. Many Americans have problems with debt, and many find that filing Chapter 7 bankruptcy gives them the protection they need. The most common reasons that have led individuals and families into bankruptcy include, over extension of credit, unexpected expenses, unexpected job loss, health problems and even divorce. If this sounds like you, Chapter 7 bankruptcy might give you the relief you need. Filing for bankruptcy will give you a fresh start to regain control of your finances.

To qualify to file for bankruptcy under Chapter 7 you will have to pass the means test. The means test was one of the biggest changes to the BAPCPA in 2005. The idea behind the means test was to bring clarity on how to determine whether a debtor qualifies to file Chapter 7 or not. The first step in the means test is to determine the level for your state. If your average income during the last six months look back period is less than the median income for your state, you are eligible for Chapter 7 bankruptcy. However, if your income is more than the for your state, you must determine the amount of your disposable income. To calculate your disposable income the debtor needs to take their current monthly income, which is the total of the last six months income divided by 6, giving you the average which is the current monthly income. Next, you need to deduct all your expenses not including the payments you’re intending to discharge in bankruptcy. In the end, you can’t have more than $170 left at the end of the month after paying all your expenses. This is where a bankruptcy attorney can be a huge asset.

The new bankruptcy code has become much more complex, so a person desiring to file bankruptcy may need the expert opinion of someone who knows the ins and outs of the court system. Wondering if you qualify for Chapter 7 can be confusing so take a moment and fill out the form for a FREE NO OBLIGATION CONSULTATION from a local bankruptcy attorney who will be able to evaluate your personal situation.