Chapter 7 Bankruptcy – Are You Eligible?
No one looks into filing for bankruptcy unless you’re financially cornered and looking toward a place where you’re not at the end of your ropes.
If you started to research or look into filing for bankruptcy, good for you. All the negativity and bad stigma associated with filing for bankruptcy is unnecessary. You’re in a mess for whatever reason that no one including yourself should judge you for. If you can find a way out of it by filing bankruptcy, then you should really consider it.
If you are at least curious, that’s good. Remember that bankruptcy is an area of federal law and jurisdiction. That means the United States of America believes that you have a right to file for bankruptcy if you are eligible. Now, I get that the government allows it, but they set the standards for whether you’re eligible. The bottom line is that if you’re debt free, you can build yourself back up and will either be less of or not a burden later on.
So, how do you know if you’re eligible? Just because you have credit card debt or missed your car payments doesn’t mean you are eligible. There are criteria that you must meet such as how much debt you have and how much personal and real property you owe. But the most important thing for a Chapter 7 bankruptcy is whether you qualify by using the “Means Test”.
In short, the means test is an evaluation of how much you make each month and how much you have to pay each month. Included in there is a maximum you can earn when you’re filing for a Chapter 7 bankruptcy. In Northern Virginia, the amount for a single filer with no kids starts at $64,000 and it goes up with each added dependent.
So what happens if you make more? It may be okay as long as there’s no presumption of abuse. To make this as simple as possible, as long as you have enough expenses going out each month and can prove that it exceeds what you make, then you may be eligible despite making more than the median income threshold.
Despite the math and computability that says you can’t do a Chapter 7 bankruptcy because you make too much, you may still be eligible. Call me and we can talk. Be safe and be well.