The first question clients usually ask is if they are eligible to file a chapter 7 bankruptcy. Bankruptcy courts and laws can be confusing to someone who hasn’t been through the process, especially discovering eligibility thanks to the new bankruptcy laws. 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. You do not have to file with your spouse if you are married. 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 - Under the new bankruptcy laws chapter 7 filers must submit a bankruptcy means test which checks if you have the means, enough liquid 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.

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 less 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. 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 bankruptcy information for chapter 7 and 13, and DoItYourselfBankruptcyForms.com where you can find free bankruptcy forms online.