Qualifying for Chapter 7 Bankruptcy

Debtors cannot simply decide to file Chapter 7, they must first pass a means test. The means test is based on a formula based on median income which the federal government compares your household income to the median household income for your family size in the county in which you live. The median income is different for each debtor since factors like household size do have an impact on the rate.

It is important to note that many people who do not pass the means test initially are able to pass it when factoring in all of their household expenses and the amount of debt they owe. Before filing it is important to have an attorney experienced in bankruptcy law review the means test. Borrowers who earn less than the median income for a family their size are generally eligible to file for Chapter 7.

Another criteria which must be met is each debtor must attend a credit counseling class during the process. This course is available on-line and is easy.