Filing Chapter 7 bankruptcy is a legal process supported by the United States Federal courts. Consumers are required to file in the state in which they live. The method of filing for bankruptcy can intimidate those who are uncomfortable with the judicial system. However, it is primarily administrative in nature, with numerous motions and documents to file and turn into the correct offices in state district bankruptcy courts. Most bankruptcy courts are presided over by a trustee and often a bankruptcy lawyer attends the proceeding on your behalf. A judge only makes a ruling if questions arise regarding filing eligibility or discharge of certain secured debts.

Means Test Eligibility

The results of the means test are used to determine filing eligibility. This income-based test is designed to reserve bankruptcy benefits for those who truly cannot afford to pay back their debts. Having very little disposable income each month to pay bills will more than likely determine eligibility for discharging unsecured debt. The test utilizes a two-step process used to decide whether or not an individual will have enough money available to make minimum payments to creditors.

  • Step one: median income comparison. The first step involves comparing total income with the median income for a family of the same size. Your median income may differ substantially depending on where you reside. If your median income is above or below the state median income table, step two is conducted.
  • Step two: Income and debt calculation. The second step involves subtracting certain allowable expenses from income to determine disposable income. If your income is less than $6,000 per year, you are eligible for filing Chapter 7. If your income is over $10,000 per year, you may not qualify.

The Benefits of a Bankruptcy Lawyer

A bankruptcy lawyer can help you examine the Chapter 7 bankruptcy process and determine if your median income qualifies you to file. The calculation is complicated based on multiple steps requiring a keen understanding of the state laws, rules, and regulations. A bankruptcy lawyer can stop collection attempts, levies, and garnishments. In addition, even if your median income falls above $10,000 per year, it is possible to qualify by classifying particular debts as unsecured and non-priority.

The law provides debt relief options if you feel burdened with debt or just want the creditors to stop harassing you. At Brent George Law, we can help you discover if you qualify for filing Chapter 7 bankruptcy. We understand the essential nature of unique results and will strive for you to find for you the best possible solution.