Do I Qualify for Chapter 7 Bankruptcy?


In 2018, there were 11,452 bankruptcy filings in the Northern District of Texas. Of those filings, over 5,000 were Chapter 7 bankruptcies.

Filing for bankruptcy isn't an easy decision. And deciding which type of bankruptcy is right for your situation makes the decision even more difficult. Thankfully, with a little research and with the help of an experienced attorney, the process can become easier.

Here, we show you how to qualify for Chapter 7, so you can see if you're a candidate.

Pass the Means Test

Wondering how to qualify for Chapter 7 bankruptcy? Anyone granted a Chapter 7 bankruptcy must complete a means test. In simple terms, the means test determines if you have enough disposable income to pay off your current debts. If you don’t, you may qualify for Chapter 7 Bankruptcy.

The first part of the test is determining whether your annual income is below the state's median.

Median Annual Income Guidelines Based on Family Size

  • Single filer - $49,996

  • Family of 2 - $65,708

  • Family of 3 - $72,632

  • Family of 4 - $84,724

  • Families of 5 or more - Add $9,000 per additional family member

If your income is below the median amount, you qualify for Chapter 7 bankruptcy. If not, then you must move on to the next part of the test.

The second part of the test involves deducting your essential expenses from your income. Essential expenses include things like rent or mortgage, food, utilities, and medical bills. To qualify for Chapter 7 bankruptcy, you must prove that you don't have enough discretionary income to pay back your debts after paying your basic living expenses.

This step involves a lot of specific calculations, so you'll want the help of a knowledgeable bankruptcy attorney if you don't pass the first step.

Attend Pre-bankruptcy Credit Counseling

Another qualification for filing bankruptcy Chapter 7 is attending pre-bankruptcy credit counseling.

This must be completed with a government-approved credit counseling agency. Upon completing the course you will receive a certificate that you must file along with your bankruptcy petition.

What if I Don’t Qualify for Chapter 7 Bankruptcy?

If you and your attorney discover that you don't qualify for Chapter 7 bankruptcy, that doesn't mean you don't qualify for bankruptcy at all. The most common alternative is filing for a Chapter 13 bankruptcy.

A Chapter 13 bankruptcy allows people with an above-median income to qualify for relief.

In a Chapter 13 case , you enter a court-mandated repayment plan. With this plan, you'll pay a portion of your debt over a period of time and then the remaining debt is discharged..

To Verify if You Qualify for Chapter 7 Bankruptcy

Call The Law Office of Marilyn D. Garner Today!

Knowing how to qualify for bankruptcy Chapter 7 can be a difficult process. Enlisting the help of a qualified attorney will ensure that everything goes as smoothly as possible.

A bankruptcy attorney will help determine if you pass the means test. Your attorney can also help you find pre-bankruptcy credit counseling that fits with your schedule. And if you don't qualify for Chapter 7 bankruptcy, they'll review your possible alternatives.

If you want to get the best help with evaluating whether you qualify for Chapter 7 bankruptcy, contact the law office of Marilyn D. Garner today for a free consultation call 817.381.9292!

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