Not everyone meets eligibility requirements for Chapter 7 bankruptcy. Through the means test, potential filers can determine if they qualify to file. This is a test that is used to determine if you may be able to meet some level of your obligations through another type of bankruptcy called Chapter 13 or if you truly cannot make payments.
The Means Test for Bankruptcy Eligibility
You first will compare your income to the median income in your area. This will depend on your family size, so it is difficult to give estimates without first sitting down with an attorney who can evaluate the situation. If your income is less than median income, then you will qualify to file Chapter 7 bankruptcy.
If you earn more than the median income, you still may qualify for bankruptcy. Eligibility will be based on the amount of expenses you have. These are called allowed monthly expenses and include housing, transportation and basic needs. You subtract these from your income, and the amount you have is called your disposable income. If your disposable monthly income exceeds a certain amount, then you may not qualify to file for this type of bankruptcy.
If you do not qualify, you may want to seek the legal advice of a bankruptcy attorney. He or she may recommend a Chapter 13 bankruptcy instead, which requires you to make payments over a certain time period. Many people prefer a Chapter 7 bankruptcy because it erases the bills with no obligation to repay them, so discuss your options with an attorney.
Seeking Legal Representation for Bankruptcy Filing
According to the United States courts, recent statistics show that bankruptcy filings have decreased by 13 percent over a 12-month period ending at the end of March compared to the previous 12-month period. Still, filing may be the right option for many who struggle to meet their obligations.
If you are considering bankruptcy, contact the law offices of Warren & Migliaccio, L.L.P. An attorney can review your case and help determine eligibility to file for Chapter 7 bankruptcy. Contact them today at 1-888-584-9614.