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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 determining eligibility thanks to the new bankruptcy laws. Let’s look at who can file a chapter 7 bankruptcy?

Individual - Only individuals can file a chapter 7 bankruptcy. You can be single or married. You can file with your spouse or without them. 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 - The chapter 7 means test will check if you have expendable income accessible to pay some or all of your debts. Your income is compared to the state median for a family of your size, if it’s below the median then you qualify for chapter 7.

You can provide your living expenses to qualify if your income is above the median. The IRS has established standard allowances for things like housing, groceries, and other necessary expenses. If you have other expenses that are needed to live such as special medical needs, these can also be included to lower your disposable income.

You can file ch 7 if you have less than $6000 in disposable income, but if you have over $10,000 you cannot file and may be forced into a chapter 13 if you try. If your income is inbetween those limits and you can’t afford to pay at least 25% of your total unsecured debt, then you can file chapter 7, but if you can afford to pay it, then you do not qualify. 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 personal bankruptcy information, and DoItYourselfBankruptcyForms.com where you can find free bankruptcy forms online.