Posts Tagged ‘means test’

How Much Can You Earn And File Chapter 7?

In Uncategorized on November 11, 2010 at 9:50 am

To qualify for chapter 7 bankruptcy, you must prove you cannot afford to make payments on your debts. Bankruptcy law presumes that if your income is low enough you can receive a chapter 7 discharge of debts. The latest chart of annaul income looks like this:

Annual Income By Family Size

KY $36,999 (family of 1), $44,353 (2), $51,046 (3), $62,739 (4)

OH $40,091 (family of 1), $50,491 (2), $59,275 (3), $71,453 (4)

*Add $7,500 for each additional person in the family.

If, for example, you have a family of four in Kentucky and earn under $62,739, you should qualify for chapter 7. Everyone must file a monthly budget showing monthly expenses. The court examines the monthly expenses to determine if you truly cannot afford to pay back part of your debts.

If your income is more than amounts listed above, you have to show the court you can’t afford to pay back even part of your debts. You can do it, but you must persuade the court that your circumstances are exceptional. If that is not possible, I recommend filing a chapter 13 banrkuptcy. With chapter 13, you ask the court to approve a monthly payment on your debts