A Chapter 7 Bankruptcy is also known as a “straight bankruptcy” and is the most common type of bankruptcy case. Someone who files a Chapter 7 has little or no assets to pay creditors.
To qualify to file a Chapter 7 Bankruptcy you must pass a means test. Means testing looks at a debtor’s income. Usually a person must come within the state’s medium income based on the number of people in your household. The more eligible people are in your household the higher the threshold for the median income amount. For example if there is only one person in your household the medium income level is $47,683 per year. If there are two people the median income level is $61,539 per year. It keeps going up if there are more people in your household.
Generally, if you do not come within the median income you may not be eligible to file a Chapter 7 Bankruptcy. A further calculation will be necessary if you are over the median income to determine eligibility. Expenses such as mortgage/rent, living expenses for food, clothing, household supplies, transportation, vehicle ownership or lease expenses are taken into account. If the 60 month disposable income is less than $7,025.00 you pass the means test.
If you are thinking about filing a Chapter 7 Bankruptcy, contact the highly qualified bankruptcy attorney in Riverside at The Mellor Law Firm.
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