What is a Chapter 7 Bankruptcy Anyways? Part 2

What is a Chapter 7 Bankruptcy Anyways? Part 2

Do I Qualify to File for a Chapter 7 Bankruptcy?Do I Qualify to File for a Chapter 7 Bankruptcy?

To qualify for a straight Chapter 7 Bankruptcy, you have to meet the South Carolina Census Median Income test for the number of people in your household. Note that your income is your averagegross income (before taxes) for the last six calendar months prior to filing your Bankruptcy petition, excluding any benefits under the Social Security Act. If you are married, your spouse’s income in also included unless you are filing separate tax returns and have declared separate households. One of the most common questions I get from clients who plan to file bankruptcy without their spouse is whether they have to include their non-filing spouse’s income. Unfortunately, the answer is yes. The question calls for average household income, so unless you have declared separate households, your non-filing spouse’s income will have to be included.

South Carolina median income effective May 1, 2012 has been slightly increased, helping more debtors qualify to file for a Chapter 7 Bankruptcy. The figures are below:

  • Household of one: $38,849.00
  • Household of two: $49, 363.00
  • Household of three: $52,428.00
  • Household of four: $64,898.00
  • Household of five: $72,398.00

For the complete list, visit the link below:http://www.bestcase.com/MeansTestChanges/MTtablesHTMLFinal/zDT12A_11B_SC_Data.Htm

One of the first things we do at the Lam Law Firm before anything else is determine if you qualify to file under Chapter 7. We ask that you provide our firm with 6 months of paystubs for all places of employment and for all income earners in your household. After we pass this hurdle, we can then determine which direction we are going to take your case.

Even if your income falls above the median income level, you may still qualify to use a Chapter 7 Bankruptcy, but more detailed calculations must be done.

DISCLAIMER: The information contained on this page is for general information, only. It is not intended to be legal advice, nor should you make legal decisions based on this information. Please consult one of our attorneys to see how the law applies to your particular situation.