What are the requirements for filing Chapter 7?
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What are the requirements for filing Chapter 7?
Asked on February 18, 2013 under Bankruptcy Law, South Carolina
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
The new bankruptcy rules require that you meet certain criteria. Under the new rules, the first step in figuring out whether you can file for Chapter 7 bankruptcy is to measure your "current monthly income" against the median income for a family of your size in your state. Your "current monthly income" is your average income over the last six months before you file. If your income is less than or equal to the median, you can file for Chapter 7 bankruptcy. If your income is more than the median, however, you must pass "the means test" -- another requirement of the new law -- in order to file for Chapter 7 bankruptcy. The purpose of the means test is to figure out whether you have enough disposable income, after subtracting certain allowed expenses and required debt payments, to repay at least a portion of your unsecured debts over a five-year repayment period. Veterans and those who own businesses have an up in filing. I would speak with an attorney in your area to discuss your personal situation. Good luck.
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