Bankruptcy Law, Debt Relief, Timothy Kingcade Posts

How to Know If You Qualify for Chapter 7 Bankruptcy

The bankruptcy Means Test determines whether your income is low enough to file for Chapter 7 bankruptcy. The test is designed to keep high-income earners from filing Chapter 7 bankruptcy and limited to consumers who truly need it and cannot afford to repay their debts.

If the Means Test proves your income is too high to file Chapter 7 bankruptcy, you can file Chapter 13 bankruptcy and repay a portion of your debts (typically over a three-to five-year period).  Even with the requirements to pass the Means Test, it does not mean you have to be penniless to file Chapter 7.  In fact, you can earn significant monthly income and still qualify for Chapter 7- depending on the expenses you have.

The Means Test determines if you qualify for Chapter 7 by deducting specific monthly expenses from your “current monthly income” (i.e. – your average income over the six calendar months before you file for bankruptcy) to arrive at your monthly “disposable income.” The more disposable income you have, the more likely you will be required to repay your creditors.

The first step of the Means Test is to determine whether your income is more or less than the median income in your state.  Median income levels vary by state and household size.  Also, each county and metropolitan region has different allowed amounts for categories of expenses, such as necessities, housing, and transportation.  You can enter your zip code into the Means Test Calculator to determine the income requirements for your specific location.

If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at

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