How do I know I qualify for chapter 7 bankruptcy? 28 Answers as of February 12, 2011

How do I know I qualify for chapter 7 bankruptcy?

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Law Offices of Michael J. Berger
Law Offices of Michael J. Berger | Michael J. Berger
The best way to know if you qualify for Chapter 7 bankruptcy is to call me for a free consultation. My telephone number is 310 271-6223. My name is Michael Berger and I am Certified by the California Board of Legal Specialization of the State Bar of California as a Specialist in Bankruptcy law.

If you are trying to figure it out for yourself, without expert free assistance from counsel (why?), here are a few factors for you to consider:

1. Total amount of debt relative to income
2. Types of debt;
3. Gross monthly income for previous six months (please note that if you are married, regardless of whether or not a joint petition is filed, both spouse's income needs to be included, unless separated);
4. Household size;
5. Ownership of real property/amount of monthly mortgage payment + HOA dues;
6. Ownership of a vehicle that is financed or leased;
7. Whether or not all of your assets will be exempt.
Answer Applies to: California
Replied: 2/12/2011
Law Office of Larry Webb
Law Office of Larry Webb | Larry Webb
The means test is your first hurdle. How much do you make (gross) compared to the local medium income? You also have to take into consideration value of the equity in your nonexempt property. Consult with a local attorney.
Answer Applies to: California
Replied: 1/31/2011
High Desert Bankruptcy Center
High Desert Bankruptcy Center | Stephen Brittain
Under the 2005 Bankruptcy Code changes it is the responsibility of the MEANS TEST to determine if you qualify for a Chapter 7 bankruptcy. Here are some things you need to realize about the means test. First...we are talking about your GROSS (before taxes) income.

Second...if you are filing married, then both you and spouse's GROSS incomes are included in this means test computation.

Third...the amount of your permissible income is determined by how many exemptions you have. If your gross income is less than the median income for your state, then you automatically qualify for a Chapter 7 bankruptcy. If it is more then you go to part two of the means test and you are allowed to deduct certain expenses by the bankruptcy code. I often tell clients that the means test is like a tricky 8 page tax form that must be filled out by a knowledgeable expert. I know exemptions that you don't know. Come see me and i will look at your specific situation. The computing of this means test is the most difficult part of my job as a bankruptcy attorney with 20 years experience. You are making a mistake if you try to figure it out on your own.
Answer Applies to: California
Replied: 1/31/2011
Diana K. Zilko, Attorney at Law
Diana K. Zilko, Attorney at Law | Diana K. Zilko
It is best to speak with a bankruptcy attorney, since there are many questions that need to be answered to determine if you qualify for a Chapter 7. Your income and expenses are just the beginning of the analysis. If you have any further questions, please let me know.
Answer Applies to: California
Replied: 1/28/2011
Stuart Jon Bierman  Attorney at Law
Stuart Jon Bierman Attorney at Law | Stuart Jon Bierman
In general, to qualify for Chapter 7 bankruptcy the Court looks at the amount of your income, the amount of your assets such as equity in a house or a car, the amount of your disposable income after your reasonable ongoing monthly debts are paid, etc. The Court also looks at the amount of your debt and the nature of your debt: such as whether it is unsecured credit cards, student loans, debts owed to the IRS or other governmental entities, or other types of debt which can be considered non- dischargable if they were run up in what can be considered "bad faith".
Answer Applies to: New Jersey
Replied: 1/28/2011
    David R. Fondren, Attorney at Law
    David R. Fondren, Attorney at Law | David R. Fondren
    1. you have to pass the means test. 2. you have to not have a lot of surplus money after expenses. 3. you do not want to have a lot of property that can be liquidated, unless you do so knowingly. 4. you can not have filed and received a discharge in a chapter 7 in the last 8 years or a discharge in a chapter 13 filed 6 years ago. 5. you will need to disclose preference payments to insiders, transfers of property 6. you do not have any other dischargeability problems.
    Answer Applies to: Missouri
    Replied: 1/27/2011
    Law Offices of J. L. Haddock, PLLC
    Law Offices of J. L. Haddock, PLLC | Jared L. Haddock
    This is a pretty general question, but I will attempt to answer it specifically. Keep in mind that just because you may qualify for Chapter 7 does not necessarily mean that filing for Chapter 7 is advisable. In other words, even if you can file for Chapter 7, the more complicated question is whether or not you should file. With that in mind, I will answer your qualification question. One is eligible for a Chapter 7 discharge of their debts under the following conditions:

    1) They have not already received a discharge in an earlier Chapter 7 case filed within the last eight years.

    2) They have not already received a discharge of more than 30% of their debts in an earlier Chapter 13 case (that was your best effort at repayment) within the last six years.

    3) You have completed an approved Credit Counseling session and received certification of completion within 180 days of your Chapter 7 filing date.

    4) Your gross household income (based on the gross earnings for the six month period prior to filing) does not exceed the median income for a family of your size in your jurisdiction. This is called a Form 22 or "Means Test" analysis. If you earn more than the median income, a "presumption of abuse" arises. As if this computation were not complicated enough, there are exceptions that may apply even if your household gross earnings exceed the median in your jurisdiction. In other words, not everyone who earns more than the median income level is ineligible and determining whether or not you can overcome the "presumption of abuse" may require an additional six-page long formula to determine.

    5) Even if you pass the Means Test, the Court will consider whether you could reasonably afford to pay your creditors back a significant portion of the debt without a Chapter 7 discharge. If not, then you are likely eligible to file for Chapter 7 Bankruptcy.
    Answer Applies to: Michigan
    Replied: 1/27/2011
    Bankruptcy Law Center
    Bankruptcy Law Center | Bill Zurinskas
    The first question you must ask yourself is whether you have previously filed for Bankruptcy. You can only file a chapter 7 bankruptcy, once very 8 years. If you have filed a previous chapter 13 bankruptcy, you must wait 6 years between filings to file a chapter 7. The next issue is whether or not you meet the income guidelines to pass the means test. If your gross income (and your spouses') from wages or self employment (gross receipts minus business expenses) exceeds the median family income for your family size, you may not qualify for chapter 7 bankruptcy. The current limits are $47, 814 for a family of one, $63,635 for a family of two, $69,717 for a family of three, $82,621 for a family of four, and add $7500 for each additional family member for family of five, etc. Even if your family income exceeds the limits, you may still qualify for chapter 7, if not, your only bankruptcy option is to file a chapter 13 (payment plan type) bankruptcy.
    Answer Applies to: Colorado
    Replied: 1/26/2011
    Greifendorff Law Offices, PC
    Greifendorff Law Offices, PC | Christine Wilton
    To file bankruptcy under chapter 7 you must pass the Means Test. You need to know how many people live in your household and your gross income. Your income must fall below the median level income in your area. You can search the internet for free means test calculators or call an attorney.
    Answer Applies to: California
    Replied: 1/26/2011
    Mettias & Associates
    Mettias & Associates | Jimmy Philip Mettias, Esq
    There are several things that play into the qualification for Chapter 7 Bankruptcy and it is a good idea to meet with an attorney to discuss those qualification. A good bankruptcy attorney is one who will review all your financial options with you, including your bankruptcy and non-bankruptcy options, and who will be by your side every step of the way, through gathering information, filling out forms, attending hearings, and settling all matters.

    We have free consultations in our office and would be happy to set an appointment for you. Please contact us.
    Answer Applies to: California
    Replied: 1/26/2011
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Well, the best way is to see a lawyer. We don't bite. The subject of eligibility would fill a small book.
    Answer Applies to: California
    Replied: 1/26/2011
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    The only way to know for sure is to have your situation evaluated by a bankruptcy attorney. Eligibility for filing Chapter 7 is extremely complicated and based on multiple different tests some using your income for the past 6 months and comparing it to the median income for your geographic area, subtracting out IRS allowed expenses; another is using your current income and "reasonable" expenses.
    Answer Applies to: California
    Replied: 1/25/2011
    The Orantes Law Firm
    The Orantes Law Firm | Giovanni Orantes
    It is best to consult a qualified bankruptcy attorney to make this determination. If your debt is mostly business debt, you probably qualify despite the magnitude of your regular income. Otherwise, the determination depends on the "means test" - you first look at your gross income, which can be more depending on the size of your household, but even if your income is too high, you may still qualify if your "reasonable" expenses exceed your income. What is "reasonable" depends on certain standards established by the IRS and Bankruptcy Law. For example, currently, a single person with nobody else in his household may qualify for Chapter 7 relief if his/her gross income is not more than a few dollars over $47,000. That amount goes up depending on the size of the household, but the amount changes periodically.

    In any case, even if you qualify for Chapter 7 relief, you may still want to file under a different Chapter, such as Chapter 13, if doing so is more advantageous for you in the long run. For example, when you have a second loan on your house and the balance of the first loan is higher than the current market value, you may be able to "strip" the lien and discharge the second loan in a Chapter 13 (along with the rest of your unsecured debts), but not in a Chapter 7 case. Many practitioners are trying to pass precedent to accomplish this under Chapter 7, but it is *not* possible at this time.

    Ultimately, the best advice is to consult a bankruptcy attorney. Some knowledgeable attorneys, such as my firm, even provide you a free initial consultation.
    Answer Applies to: California
    Replied: 1/25/2011
    Ursula G. Barrios Law
    Ursula G. Barrios Law | Guillermo Machado
    You must pass the means test or rebut the presumption of abuse. You cannot have filed a successful Ch 7 within the last 8 years. You should be able to protect all your assets and have dischargeable debts. For more detailed info, consult our office. Thank you,
    Answer Applies to: California
    Replied: 1/25/2011
    Uriarte & Wood, Attorneys at Law
    Uriarte & Wood, Attorneys at Law | Robert G. Uriarte
    To file for a chapter 7 bankruptcy you must qualify within a means test calculation. The means test consist of the average of the last six months of income, your current household size, and some particular expenses. Give us a call and we will run a a means test calculation. Once we do this you will know if you qualify to file.
    Answer Applies to: California
    Replied: 1/25/2011
    West Themis Law, A Professional Law Corporation
    West Themis Law, A Professional Law Corporation | Sally S. Chan, Esq.
    "Qualifying" for Chapter 7 depends on my factors and considerations, including income, character and amount of debts, character and amount of assets, and related factors.

    Since 2005, the bankruptcy code requires every filer to take the means test.

    You should speak to a bankruptcy attorney to discuss these issues further.
    Answer Applies to: California
    Replied: 1/25/2011
    The Law Offices of Robert L. Driessen
    The Law Offices of Robert L. Driessen | Robert L. Driessen
    Meet with a bankruptcy attorney to go through your debts and assets.
    Answer Applies to: California
    Replied: 1/25/2011
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    Whether you qualify for Chapter 7 is a very broad question that requires a lot of information you are not providing or can provide here. You need a consultation with an attorney who specializes in bankruptcy. Also, whether or not you qualify is not the only relevant question because even if you qualify that does not mean you should file a Chapter 7 case. Chapter 13 might be a better choice. However, one of the most important reasons people do not qualify for Chapter 7 is because of income more than what is allowed to be eligible for Chapter 7. There is an amount based on the number of persons in the household that is called the "median income". If you are below median you are in as far as the income test issue. But if you are above median then you need to do complex calculations called the "means test" to see if you qualify. Another reason a person might not qualify for Chapter 7 would be if the person filed and received a discharge in a Chapter 7 within 8 years. Again, there might be other reasons why a person would not qualify for Chapter 7 bankruptcy or why a person should not file a Chapter 7 bankruptcy.
    Answer Applies to: California
    Replied: 1/25/2011
    Law Office of Harry L Styron
    Law Office of Harry L Styron | Harry L Styron
    If your net income less some qualified expenses for food, shelter, transportation and the like is less that about $50,000 (approximately) you qualify for Chapter 7. If it is more than that then you must start with Chapter 13. The actual computation of the net net income is somewhat complicated, depending on the number of people who are in your family and other factors.
    Answer Applies to: California
    Replied: 1/25/2011
    DiManna Law Office, LLC.
    DiManna Law Office, LLC. | Dawn DiManna
    It is not so much qualification as what makes sense for you in your particular financial situation. There are specific qualification rules regarding how often an individual can file, what exemptions are available to you, where you can file, but these are base on the particular facts in your case and need to be analyzed by a bankruptcy attorney.
    Answer Applies to: New Hampshire
    Replied: 1/25/2011
    Law Office of Aaron Nielson
    Law Office of Aaron Nielson | Aaron Nielson
    There are several different parts to qualifying to file a chapter 7. The most recognized are dealing with your income, if you've filed before, amount and type of debt. The better question is probably how do I fix my financial problem? Chapter 7 might not be the best answer even if you qualify. Chapter 13 and non-bankruptcy options might be better but we have no facts about your case to start deciding that. Consult with an attorney to find out what your options are so the best result is achieved.

    I offer a free consult for clients in my area as do many other attorneys. We want to make sure at the beginning that you have a case that we can help with.
    Answer Applies to: Washington
    Replied: 1/25/2011
    Judith A. Runyon, Esq. Attorney at Law
    Judith A. Runyon, Esq. Attorney at Law | Judith A. Runyon
    You would have to have a consultation with an attorney to determine that. Call me.
    Answer Applies to: California
    Replied: 1/25/2011
    Javia & Moore
    Javia & Moore | Marisa-Andrea Moore
    Generally, your gross household income and household size will determine whether you qualify for Chapter 7 bankruptcy. You should consult a bankruptcy attorney for more information.
    Answer Applies to: California
    Replied: 1/25/2011
    The Pedigo Law Corporation
    The Pedigo Law Corporation | Brian T. Pedigo, Esq.
    You have to pass the means test which looks at 1) your income, 2) the average median income of a household your size in your area, and 3) allowed deductions.

    Most bankruptcy attorneys will give you a free consultation to see if you qualify.
    Answer Applies to: California
    Replied: 1/25/2011
    Maclean Chung Law Firm
    Maclean Chung Law Firm | David H. Chung
    Qualification for Chapter 7 depends on whether or not you pass the "Means Test" which first considers your income, and if your income is higher than California's median income it will consider your expenses. The "Means Test" can be very complicated unless your income is below the median income. Consult an attorney to learn whether or not you pass the "Means Test".
    Answer Applies to: California
    Replied: 1/25/2011
    Law Office of L. Paul Zahn
    Law Office of L. Paul Zahn | Paul Zahn
    I can help you determine if you qualify. Please contact me for a free consultation.
    Answer Applies to: California
    Replied: 1/25/2011
    The Law Office of Brian Nomi
    The Law Office of Brian Nomi | Brian H. Nomi
    It's best to speak with a qualfied bankruptcy attorney to see if you can fit in a Chapter 7 case. There are many factors, such as your income, your assets, and the types of debts you have.
    Answer Applies to: California
    Replied: 1/25/2011
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