Chapter 7 Bankruptcy Filing

  • Chapter 7 Bankruptcy

Eligibility For Chapter 7 Bankruptcy Filing

It is an imperative process to understand at first whether as individuals we can file for Chapter 7 bankruptcy and get our debts discharged or not. The ability to file for bankruptcy under Chapter 7 clauses majorly depend on your household income (drawn monthly at the time of filing). The monthly income includes

  • The average gross income (prior to taxes deduction) that you have drawn in the last six months
  • The gross income of your spouse
  • All contributions to household expenses by other members of the family

The monthly income excludes the amount arising out of

  • Unemployment
  • Social Security Benefits
  • Compensation for victims of crime or terrorism

It is also important to note that if there is a portion of your spouse’s gross income that is not channelized for the household expenses, then that value cannot be counted for the available amount towards repaying your debts. In this case, the spouse’s income information is purely for documentation needs and it does not have any effect on the Chapter 7 bankruptcy filing ability.

Eligibility check through the medium family income by family size

If the debtor’s current monthly income that is calculated as above, is less than the state median family income for a household of the number of members, then the debtor automatically qualifies for Chapter 7 bankruptcy. If the household income is greater than the median income, then the debtor may or may not be eligible towards the filing of Chapter 7 bankruptcy


Family Size         California      Nevada            Texas
1-person families  $49,983            $43,685              $42,908
2-person families  $64,779            $56,367              $58,666
3-person families  $68,917            $59,346              $61,502
4-person families  $79,418            $69,672              $71,973

Referring to the above data, if your current monthly income is greater than the state median family income, then the court checks your allowable expenses. Remember the allowable expenses may or may not be the actual value that you spend on your basic living expenses. After deducting these allowable expenses from your current monthly income, the balance money is assessed for its repayment capacity towards certain debts over a period of time. If that condition is met, then you may file for Chapter 13 bankruptcy.

Living in Los Angeles? Desperately seeking skilled bank attorney, Los Angeles area for assisting you with Chapter 7 bankruptcy filing check? Then stop at Recovery Law Group – they have wide expertise handling Chapter 7 cases in the states of California, Nevada, and Texas.