Do i qualify for bankruptcy?
When the bankruptcy law was changed back in 2005, many people were led to believe that they could no longer qualify to file Chapter 7 or Chapter 13 bankruptcy. This is simply not true and the reality is that most people who qualified to file bankruptcy before the law was changed are still eligible to file now. To qualify for Chapter 7 bankruptcy with consumer debts, you generally must pass either the income test or the means test and also the Actual Income and Expense Test. Our NYC bankruptcy attorneys located in Bronx, NY can explain any of these calculations in greater detail. When filing a Chapter 13 proceeding, the requirements are generally that a person have a regular source of income and not be over the debt limit.
The Income Test
The Income Test for Chapter 7 bankruptcy looks at your average gross income during the six months prior to the month you file your bankruptcy petition. If your average monthly income annualized (times 12) is less than your state's median income for your household size, you automatically qualify to file Chapter 7.
Below is a chart containing the most recent median income figures for each household size in New York (these amounts are updated periodically by the U.S. Trustee Office).
To see whether or not you qualify under this income test, add up all your gross income for your household for the six calendar months immediately preceding the current month. Then multiply the total by two and compare it to the chart.
For example, any individual whose annualized income is less than $48,109.00 will automatically pass the Income Test.
Gross Income Calculation
Total household income for last six calendar months $_____________ x 2 = Average annual income $_____________
If your income is higher than the median income for your state, based on your gross income for the previous six months, but your income has recently gone down, you might consider waiting for another month or two to file. The delay may render your income for the new six-month period low enough to produce an average below your state’s median.
The Means Test
Even if you do not pass the income test, you might still qualify to file Chapter 7 Bankruptcy using the Means Test! If your household income is above the median income for your state and household size, you may still be able to file for Chapter 7 bankruptcy if you can show that your expenses and allowable deductions leave you with no money to repay some of your unsecured debts.
The Actual Income and Expenses Test
Iif you pass the income or means test, most bankruptcy courts will also require that your actual income does not exceed your actual expenses each month by more than about $200. This determination is based on the income and expense schedules that must be filed with every bankruptcy and is generally a budget based on your expected future income and expenses.
The Bronx Bankruptcy Attorneys at The Law Offices of Daniel M. Katzner, P.C. have over ten years of experience in performing these calculations and are available anytime to answer questions to help you determine if you qualify for Chapter 7 bankruptcy.
The Income Test
The Income Test for Chapter 7 bankruptcy looks at your average gross income during the six months prior to the month you file your bankruptcy petition. If your average monthly income annualized (times 12) is less than your state's median income for your household size, you automatically qualify to file Chapter 7.
Below is a chart containing the most recent median income figures for each household size in New York (these amounts are updated periodically by the U.S. Trustee Office).
To see whether or not you qualify under this income test, add up all your gross income for your household for the six calendar months immediately preceding the current month. Then multiply the total by two and compare it to the chart.
For example, any individual whose annualized income is less than $48,109.00 will automatically pass the Income Test.
Gross Income Calculation
Total household income for last six calendar months $_____________ x 2 = Average annual income $_____________
If your income is higher than the median income for your state, based on your gross income for the previous six months, but your income has recently gone down, you might consider waiting for another month or two to file. The delay may render your income for the new six-month period low enough to produce an average below your state’s median.
The Means Test
Even if you do not pass the income test, you might still qualify to file Chapter 7 Bankruptcy using the Means Test! If your household income is above the median income for your state and household size, you may still be able to file for Chapter 7 bankruptcy if you can show that your expenses and allowable deductions leave you with no money to repay some of your unsecured debts.
The Actual Income and Expenses Test
Iif you pass the income or means test, most bankruptcy courts will also require that your actual income does not exceed your actual expenses each month by more than about $200. This determination is based on the income and expense schedules that must be filed with every bankruptcy and is generally a budget based on your expected future income and expenses.
The Bronx Bankruptcy Attorneys at The Law Offices of Daniel M. Katzner, P.C. have over ten years of experience in performing these calculations and are available anytime to answer questions to help you determine if you qualify for Chapter 7 bankruptcy.
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