Is there such a thing as making too much to qualify for chapter 7 bankruptcy? 48 Answers as of November 14, 2011

If your debts are primarily non-consumer, then you can file Chapter 7. If you debts are primarily consumer, then we have to take into account your income. Your current income for this purpose is based on your average income for the past six calendar months. If your current income is below the median income, you are most likely eligible for Chapter 7. You would have to be in a household of at least 10 people in order to be below median. If you are above the median income, you may still be eligible for Chapter 7 bankruptcy if you pass the "Means Test". The Means Test is a somewhat complex formula that is supposed to determine whether it can be presumed that you have sufficient disposable income to make a payment of about $100 or more per month under Chapter 13. The idea behind the law is that higher income earners should at least pay some of their debt through Chapter 13 bankruptcy. This analysis can be quite involved. I recommend that you call an experience bankruptcy attorney for an office consultation.

Probably not, unless you have significant exemptions and dependents that you live with. It is not impossible. If you are both financing cars, and you have two or three children/ dependents living with you, it would be doable. You need to hire an experienced bankruptcy attorney to work through all the numbers with you. Good luck.

Yes, you can make too much money to qualify for Chapter 7 and your income may be too high. However, there are exceptions to the general rule. Thus, hire a bankruptcy attorney to find out if Chapter 7 will work for you.

Qualification for Chapter 7 bankruptcy is possible even with higher income. Your qualification will depend in part on the number of people in your household and the household expenses, including any mortgages that may be in foreclosure and other secured debt. You will need to meet with an attorney to calculate the means test based upon your circumstance in order to see if you qualify for Chapter 7. You will also need to assess your assets to see if you qualify to exempt all assets or if they exceed the allowable exemptions.

That depends on a variety of factors including your household size, the amount you are obligated to pay on secured debts such as mortgages and car loans, your monthly medical costs, your child care costs, etc. You would need to speak with a bankruptcy attorney about your situation to figure out whether you would be eligible to file for a chapter 7.

It would depend on the number of dependents. The "means" tests is calculation that is done by your bankruptcy attorney that determines if you "qualify" for bankruptcy.

There is a calculation called the "means test" that determines eligibility to qualify for chapter 7. There are various deductions allowed and the specific ones can be elicited by consulting with a bankruptcy attorney.

You may or may not, depending on the means test. That requires a lot more information than what you posted, including information on your secured and unsecured debts, size of your mortgage payment, certain other expenses, family size, etc.

Not necessarily. First, you have to calculate your current monthly income. Then you must apply your CMI to the appropriate median income figure. The bankruptcy law defines your CMI as your average monthly income received during the six-month period that ends on the last day of the month preceding your filing date whether or not the income is taxable. When including wages or other sources of income, you must include the gross amount, not the net income you actually receive after deductions from taxes and other with holdings are made. To compare your current monthly income to the family median income for your state, you'll need to multiply your current monthly income by 12. If your CMI is less than or equal to your states family median income you aren't subject to the means test in a Chapter 7 bankruptcy filing. If your current monthly income as calculated above exceeds your states family median income then you must look at other factors. If the majority of your debt is consumer debt (meaning it doesn't come from operating a business, tax debts, or debts for personal injury or property damage you caused to someone else), you'll have to take whats called the means test. Under this test, you can't file for Chapter 7 bankruptcy if, after certain expenses are deducted, your remaining income would exceed $10,950 when projected over a five-year period ($182.50 per month) or would be equal to at least $6,575 over five years ($110 per month) and would pay at least 25% of your unsecured, non-priority debts over that same period. Unsecured, non-priority debts include credit card and department store charge card bills, medical bills, utility bills, and student loans. If your remaining income would be less than $6,575 when projected over the next five years, you will pass the means test and can file for Chapter 7 if you meet the other eligibility requirements.

Not likley.... But - see a competent bankruptcy attorney, bring him or her your pay stubs from 51/201 to the present, bring any contracts you have on vehicles you are paying on, mortgage statements, statements on any boats, RVs or things like that. There is allot that goes into the means test, so these documents are necessary (at a minimum) to determine eligibility. It also depends on how many kids you have (if any), medical expenses, charitable donations, life insurance, and some other things. You could be very surprised to find that a Ch13 would work for you.

Depends on family size, what your corresponding expenses are, etc. you will need to talk with a bankruptcy attorney to really know for sure.

It all depends on your ability to pay your bills.

Yes, you can make too much to file a Chapter 7 bankruptcy. There is a "means test" that has a basic income threshold to determine if you have to file a Chapter 13 bankruptcy instead of a Chapter 7. Even if you are above the income threshold, you may still be able to file a Chapter 7 depending on what you have for allowable expenses. Each case is different so consultation with a local bankruptcy attorney is recommended.

No. You will be required to file Chapter 13 and make a plan to repay your creditors some portion of what is owed over 3 to 5 years (likely the latter, but it depends on the size of your family and other factors).

It depends on the amount of secured debt that you have and on other items that must be disclosed in the means test. You may qualify even if you make more than the median income. See an attorney and have him or her run a means test using your last six months of paycheck stubs.

It depends upon also your monthly living expenses

You must go through the means test which determines your eligibility. If you have a lot of dependents and/or secured debt, you may be able to file a Chapter 7. Another option may be to reduce your monthly payment/debt through a Chapter 13.

Yes. If your debt is primarily consumer debt (debt incurred primarily for personal, household or family purposes) you probably will not qualify because your income will probably show an ability to pay at least some of the debt through a reorganization plan. This is one area where you definitely need to consult with tan attorney. It is impossible to do such a case on your own without the assistance of a qualified attorney.

Yes, there is such a thing as making too much to qualify. If your annual income is $130,000.00, I would think that it is highly unlikely that you would qualify to file. As an example, in Texas, the cutoff for a family of 4 is $63,859.00.

If the majority of your debts are consumer debts (including credit cards, personal loans, the mortgage on your primary residence) then you make too much money to file a Chapter 7 bankruptcy. If the majority of your debt is non-consumer debt (business or tax related, for instance) then the income limit does not apply.

It is possible to qualify but with an income that high you really need to consult with a bankruptcy expert who knows all the ins and outs of bankruptcy lawso they can tell you what your options are.

With that income it is very unlikely that you would qualify for a chapter 7, but it depends on how many kids you have and what other expenses you have.

Yes, it is possible to earn enough that you do not qualify for Chapter 7. With a household income of $130,000/year, your household expenses will help determine if you can qualify for Chapter 7 relief.

There are situations where this income level could still be worked into a Chapter 7. First, to qualify for filing under Chapter 7, the following are considered: Does your income fall below the Georgia Median. If yes, then you are not required to complete the means test and you may be eligible to file under Chapter 7 of the bankruptcy code. Your household size is a large factor. If your income is above the Georgia Median, then you must complete the Means Test. This is a spreadsheet that takes your income and compares it to local and national standards for specific expenses to determine whether or not you should have disposable income remaining to pay creditors. If your disposable income is within a specific amount, then you may again qualify to file a Chapter 7 bankruptcy. However, if your disposable income is above that threshold, then it is unlikely you will qualify to file a Chapter 7. Even if your income is below the Georgia Median and your disposable income as computed by the Means Test is below the threshold, you must still complete schedules I and J. These schedules look at your actual income and expenses. Again, based on your situation, the court will look to see if you have any disposable income to pay creditors. You do not have to have a zero or negative amount in monthly disposable income to qualify under Chapter 7, but the less you have remaining available would be a good indicator that you may qualify for a Chapter 7. Another consideration is the amount of assets you have available. This alone does not mean you would not qualify to file a Chapter 7 bankruptcy, but if your allowable expenses are less than your available assets, then you may not want to file a Chapter 7 - since there is a good chance a Trustee would look to liquidate any assets available in excess of your exemptions. An issue also arises if you are behind on your home and other secured debts. While you may qualify for a Chapter 7 and being behind on your secured debts would not keep your case from being discharged, there is not provision in a Chapter 7 to cure those arrearages. Another caveat, if the majority of your debt is considered business debt, then the means test would not come into play.

Probably not, a family of 4, living in Michigan is allowed $70237 for income. There are things that can make that number higher, but generally not as high as you are talking about.

It depends on the size of your household. You may but most likely you will not.

Yes. To qualify for Chapter 7, you have to pass an income-based means test which is calculated on a 6-month rolling average prior to filing and compared to median income in your geographic area. As such, the income limits may vary by a substantial amount depending on where you live. Also, there are certain payments and expenses that can be deducted from your income to reduce your average monthly income for means-test purposes. A bankruptcy attorney can assist you to determine if you can qualify for Chapter 7, or if you will have to file a Chapter 13.

While there are in fact income limitations (Median Income figures) that may limit your ability to file a Chapter 7, there may also be factors that work in your favor. For example: Defendants? Mortgage payments? These are two huge categories that may qualify you for Chapter 7.

Based on the income stated with just you and your husband, it is well above the median income for any state, so it is highly unlikely. However, why I highly unlikely, is it also depends on the family size, allowable expenses which can be deducted off of that income, and the total amount of debt, all of which are factors which affect whether you still qualify for a Chapter 7 even with income above the median.

There is a means test. Most likely, with the salary you gave, you would not qualify for a chapter 7 bankruptcy.

Oh yes. Since 2005 you have to pass the means test which compares your income less allowed expenses to the IRS standards for your area.

It depends how many dependents you have and what other expenses you have. You do NOT qualify for chapter 7 without passing the Means Test. Your attorney should see if you pass the Means Test to see if you can qualify for chapter 7. If you do not, then you can look into filing a chapter 13 to pay a portion of the debt over 5 years.

It depends on whether your debts are primarily "consumer debts" - for example, credit card debt. There are income limits for consumer debt discharge in bankruptcy.

Maybe but it also depends on many things like the number of dependents, mortgage payments, car payments, charitable contributions, tax withholdings, medical insurance cost, etc.

Absolutely, Yes. We run the means test and if, after taking all of the allowable deductions, a presumption of abuse arises, then yes, you make too much to file a Chapter 7 in most cases (the exceptions would be extremely rare in that situation). If both you and your husband make a total annual salary of $130,000, I don;t think you will qualify for a Chapter 7, unless you had LOTS of children and other justifiable expenses. However, you could still file a Chapter 13.

Yes, it is possible that your income will disqualify you from filing for chapter 7 bankruptcy. I suggest you contact an attorney to discuss the Means Test with you.

There is an income limit, but you may still be able to qualify based upon your monthly expenses.

Yes. However, if it's more than 50% business related, you could file Chapter 7. If it's less than 50%, it depends on the number of people in your household, the amount of secured debt you have and other specified expenses that can be "backed out." It's a complicated calculation.