Can I File Chapter 7 Bankruptcy?
Consequently, individuals are required to take a “means test” in order to determine whether they qualify for a Chapter 7 bankruptcy.
This Section 707(b)(2) of the Bankruptcy Code applies a "means test" to determine whether an individual debtor’s chapter 7 filing is presumed to be an abuse of the Bankruptcy Code requiring dismissal or conversion of the case (generally to chapter 13). Abuse is presumed if the debtor’s aggregate current monthly income (see definition above) over 5 years, net of certain statutorily allowed expenses is more than (i) $10,950, or (ii) 25% of the debtor’s nonpriority unsecured debt, as long as that amount is at least $6,575. The debtor may rebut a presumption of abuse only by a showing of special circumstances that justify additional expenses or adjustments of current monthly income. Click for more: Means Test Article involves a review of your income and all of your assets and liabilities, including your bank accounts, properties and other financial information. The means test first compares your income to the median income in your state. If your income is lower than the median income in your state, you can file for The chapter of the Bankruptcy Code providing for "liquidation,"(i.e., the sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors.) Click for more: Chapter 7 Bankruptcy A legal procedure for dealing with debt problems of individuals and businesses; specifically, a case filed under one of the chapters of title 11 of the United States Code (the Bankruptcy Code). Click for more: Bankruptcy Introduction Video. However, if your income is greater than the median income in your state, other calculations regarding your income and allowable expenses are required to determine whether or not you can file for Chapter 7 bankruptcy.
A bankruptcy lawyer can help you figure out whether you will qualify for a Chapter 7 bankruptcy, even if you do not satisfy the means test. It is critical that you proceed carefully and correctly if you are thinking about filing for bankruptcy. Some individuals are denied the opportunity of filing a Chapter 7 bankruptcy because they did not fully understand how to fill out the form for the means test. At Hallstrom Klein & Ward LLP, a qualified bankruptcy attorney will help you figure out if you qualify for Chapter 7 bankruptcy, and will file all the necessary paperwork with the court. The process is very technical and complex, so it is important to seek legal assistance for your bankruptcy filing. Contact us by calling (949) 450-8500 today for your FREE consultation.
Call now: (949) 450-8500