If you are struggling with debt, but are wondering if you make too much money to file bankruptcy, then read on.
To be eligible to file Chapter 7, you must pass what is called a “means test”; this determines whether or not your income is low enough to qualify. Your debts have to be primarily consumer debts, and not business debts, to take the means test. If your income is lower for your household size then you would qualify and would not have to go further with the test.
2 Member Household – $55,872.00
3 Member Household – $70,092.00
4 Member Household – $81,961.00
5 Member Household – $90,061.00
6 Member Household – $98,161.00
7 Member Household – $106,261.00
8 Member Household – $114,361.00
9 Member Household – $122,461.00
10 Member Household – $130,561.00
The means test varies from state to state and household size.*
You don’t have to be penniless in order to file Chapter 7 bankruptcy. You can earn monthly income and still qualify for Chapter 7 bankruptcy if you have a lot of expenses, such as high mortgage, car loan payments, taxes, and other expenses. The computation gets more complex. If you do qualify for Chapter 7 bankruptcy you may be able to wipe out your debts altogether.
The good news is for those with higher income who fail the means test, you may still be able to file Chapter 13 bankruptcy. To file Chapter 13 bankruptcy, you will need to have a “regular source of income”, in addition to some disposable income, that can be applied towards a payment plan. Chapter 13 can be used to prevent a home foreclosure; make up missed car or mortgage payments; pay back taxes; stop interest from accruing on your tax debt (local, Pennsylvania state, or federal); keep valuable non-exempt property, etc.
The attorneys at Feldman Law Office understand the difficult situation ahead of you and we are here to help. Our aim is to see that our clients resolve their legal issues and get their lives back on track as soon as possible. Call us today for more in-depth information on Chapter 7 and Chapter 13 Bankruptcy Eligibility.
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Conveniently located in Allentown, PA. Serving the Greater Lehigh Valley area.