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The basic question clients usually ask is if they are eligible to file a chapter 7 bankruptcy. The new bankruptcy laws have modified who is eligible to file personal bankruptcy to keep people from taking advantage of the system. Let’s look at who can file a chapter 7 bankruptcy?

Individual – In order to file ch 7, you have to be an individual, businesses are not eligible. You can be married or single. You can file with your spouse or without them. If you file without your spouse you will still have to disclose their income in order to determine if you are eligible to file chapter 7.

Income – Under the new bankruptcy laws chapter 7 filers must fill out a bankruptcy means test which checks if you have the means, enough spendable income, to pay at least a portion of your debts. If your income is beneath the state median for your family size, as determined by the bankruptcy guidelines then you are eligible for ch 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. Extraordinary expenses may also be included such as medical needs or special diets for health issues.

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 it’s between $6000-10,000 and you can pay at least 25% of your unsecured debt then you do not qualify for ch 7, if you cannot pay at least 25% then you can file chapter 7 bankruptcy. 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 bankruptcy information for chapter 7 and 13, and DoItYourselfBankruptcyForms.com where you can find free bankruptcy forms online.