Markowitz Law Firm, LLC
Toll Free866-437-1189

Call To Schedule A Consultation

Are you eligible for a Chapter 7 bankruptcy?

We've said in the past that Chapter 7 bankruptcy is not necessarily a negative thing, but that it can be a way to reset your financial situation so you can create a more positive future. Yes, you are probably in a negative situation if you are considering bankruptcy, but going through bankruptcy is an active and positive step to a different situation. That being said, not everyone can file Chapter 7 bankruptcy.

First of all, you can't file if you have recently filed or if, within the last 180 days, you were part of a personal bankruptcy case that was dismissed because you failed willfully to appear in court as required or provide the appropriate information. This would not be the case if you didn't appear because of a proven situation outside of your control, such as a major medical emergency.

Income and your true ability to make some payment on your debts might also be considered when a court decides if you are eligible for a Chapter 7 bankruptcy. If, for example, you are deemed to have a stable and sufficient income to make certain payments, your filing might be transferred to a Chapter 13 bankruptcy. In Chapter 13, you are able to keep some of your assets but you also make payments to creditors through a reorganized payment plan.

To determine financial eligibility, the court first compares your income with state medians. If your income is above the median, the court applies a means test. That test looks at your average income per month based on a five-year history. If it is over $12,475 or is 25 percent more than unsecured debts, then you might not be eligible for Chapter 7. Understand these requirements and calculations can be difficult, which is why you should speak to a bankruptcy lawyer before making any decisions or assumptions about what your options are.

Source: United States Courts, "Chapter 7 - Bankruptcy Basics," accessed March 04, 2016

No Comments

Leave a comment
Comment Information

3131 Princeton Pike
Building 2B
Suite 105
Lawrenceville, NJ 08648

Toll Free: 866-437-1189
Phone: 609-482-3138
Fax: 609-896-3184
Map & Directions

Send Us An Email.Get Started Today.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy