Husker Law

Free Consultation

Call 402.415.2525|BOOK NOW

  • About Us
  • Meet Our Team
    • Michael J Sands
    • Aaron C Wegner (1981-2020)
    • Keith M Buzzard
    • Ryan A. Steen
  • Practice Areas
    • Divorce
      • $1000 Uncontested Divorce
      • $1200 Uncontested Divorce
      • Annulment
      • Legal Separation
      • Prenuptial & Postnuptial Agreements
      • Collaborative Divorce
      • Divorce Mediation
      • Military Divorce
    • Bankruptcy
      • Chapter 13 Bankruptcy
      • Chapter 7 Bankruptcy
    • Family Law
      • Child Custody
      • Child Support
      • Paternity Cases
      • Guardianship
      • Domestic Violence
    • Other Practice Areas
      • Restraining Order
  • Blog
  • Contact

Do I Qualify for a Chapter 7 Bankruptcy?

September 5, 2014

Do I Qualify for a Chapter 7 Bankruptcy

Since 2005, all consumer bankruptcy filers are subjected to what is called a means test. The results of the means test will determine whether you qualify for a Chapter 7 total liquidation bankruptcy or if your only choice is to file a Chapter 13 reorganization and repayment of a portion or all of your debt.

In order to “pass” the means test, you must make less than the median income for the county that you live in. You can find out what the median income in your area is at the US Department of Justice’s website. As you can imagine, these amounts change so it’s important to use these as a guide and consult with your attorney if you have any questions.

The income used to calculate the means test is your past six month’s gross income. This does not mean the past 180 days. This is the six months prior to the month you file your bankruptcy in. Whether you file August 1st or August 30th, the income you made between February 1st and July 30th will be used for the test.

Because of this we will need to know what your income is for the past seven months, in addition to your past two year’s income, which we can get from your tax returns.

The Bankruptcy Code requires debtors to file written proof of their income received within 60 days prior to the filing date. However, only the six months prior to filing is used to calculate the means test.

Although you may pass the means test, the trustee may still object to you filing under Chapter 7 based on something called the “totality of the circumstances.” This is not extremely common, but it does happen more often when a person’s income seems to barely pass the means test.

Now, do not be too concerned if you review the median income for your area and your income is above that amount until you have consulted with your attorney. There are certain expenses that you can use as deductions to figure your income; however, this can be a very complicated process and should be left to your attorney to figure out.

Filed Under: Bankruptcy

Top

1055 N 115th St, Ste 302, Omaha, NE 68154

T: (402) 415-2525 | F: (402) 415-2551 | E: info@huskerlaw.com


TELL US ABOUT YOUR LEGAL ISSUE

  • How Can We Help You?

  • The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

    Privacy Policy
  • This field is for validation purposes and should be left unchanged.

Business Hours
Monday - Friday: 8am- 5 pm
Closed: Saturdays, Sundays and All Holidays

West Omaha Husker Law
1055 N 115th St
Ste 302
Omaha, NE 68154
Phone: 402-415-2525
Fax: 402-415-2551

— Practice Areas

• Divorce

• Family Law

• Bankruptcy