Utah Individual Bankruptcy Filing Qualifications Lawyer
Chapter 7 Attorney
QUALIFYING FOR A CHAPTER 7 BANKRUPTCY
In 2005 federal legislation attempted to limit the number of bankruptcies that were being filed. In doing so the legislature made it a little more difficult to qualify for a chapter 7 bankruptcy. The most significant change was the creation of the “means test”.
THE MEANS TEST
The Means Test is a financial criteria that determines whether an individual or family qualifies for a chapter 7 bankruptcy or if they will be compelled to file a chapter 13 bankruptcy. The IRS has set a median income for each state wherein they’ve determined that any given person that is making that amount should be able to pay necessary debt. In 2010, the IRS standard for a single individual is $50,388.00 a year.
In order to determine your yearly income by bankruptcy law standards, take the gross income for the last six months and double it. If the amount you came up with is less than the above referenced standard of living for a single individual then there is a presumption that you qualify for a chapter 7, if you make more than the standard of living then there is a presumption that you should at least be able to pay back part of your debt and you may be compelled to file a chapter 13.
Now having said that, it is possible to be over the median income and still qualify for a chapter 7, depending on your necessary expenses. It is impossible to determine if you will fall in this category without reviewing the specific facts of your case. The attorneys at Salcido Law Firm would be happy to sit down with you and go over these options and answer any questions you have at no cost to you.
Another factor that determines whether or not an individual qualifies for a chapter 7 bankruptcy is his or her budget. The attorneys at Salcido Law Firm will help you determine what your average monthly income and expenses are. After taking debt that will be discharged in the bankruptcy out of the picture, if you have excess money at the end of each month then there is a presumption that you should file a chapter 13 bankruptcy since you have enough money to make the monthly payment. If you have zero money left over each month or if you are in the hole, then you’ll qualify for a chapter 7.
YOU QUALIFY FOR A CHAPTER 7 BANKRUPTCY, NOW WHAT?
Once we have determined if you qualify for a chapter 7 bankruptcy, we will discuss whether a chapter 7 would be beneficial to you under your specific circumstances. In other words, even if you qualify for a chapter 7, you may want to file a chapter 13 in order to keep certain assets from being liquidated. Such might be the case if you have a house or other property that is worth a lot or has a lot of equity. The attorneys at Salcido Law Firm are happy to go over these options at no cost to you, give us a call to set up a free consultation.
Call us anytime at 801.413.1753 or email us and we will schedule a free consultation with you so you can sit down with one of our Salt Lake City bankruptcy lawyers and discover what are your best options.