Qualifying for Chapter 7 Bankruptcy

 Posted on September 04, 2014 in Chapter 7

In order to qualify for Chapter 7 bankruptcy, the U.S. Bankruptcy Court requires a person to pass a “means test.” This means test will determine if your Chapter 7 bankruptcy should be dismissed or if you should actually be filing for Chapter 13 bankruptcy.

In order to pass the means test, the courts look at your income for the prior six months before you filed for bankruptcy and then doubles that figure. That amount must be below the median level for the state you live in. In Texas, the annual median income is as follows:

• Single person household: $41,960
• Two person household: $57,121
• Three person household: $60,440
• Four person household: $69,570
• Add $8,100 per person over four

If your income falls below the median, then you should have no problems qualifying for Chapter 7 bankruptcy. If it goes above, then a qualified bankruptcy attorney can go over what other options you may have.

If you have an occupation that you earn more money or where your monthly income fluctuates, then the time of year you file could make all the difference in whether or not you will meet the means test and qualify.

Teaching is a perfect example of this type of occupation. Teachers typically work ten months per year, from September until June. During the summer vacation months of July and August, they do not draw paychecks. September could be the best time for a teacher to file bankruptcy, since the court does not count checks for the month you file in. This means that the teacher’s checks for the months of March through August will be used to calculate the means test. Since July and August are “checkless” months, this means only four months of income will be used for the calculation and could make a difference in qualifying for Chapter 7.

If you are struggling with debt problems in the San Antonio, Texas area due to job loss, medical issues, or any other reason, seek help from a experienced San Antonio bankruptcy attorney today. Contact the Law Offices of Chance M. McGhee for all of your bankruptcy needs, and to start the process of financial relief and recovery.