Understanding Chapter 7 Bankruptcy
When considering filing for Chapter 7 bankruptcy, one of the most common questions that come to mind is, “How much money can you make?” This article delves into the various factors that determine your eligibility for Chapter 7 bankruptcy and the potential financial implications.
Income Limits and Eligibility
Eligibility for Chapter 7 bankruptcy is primarily based on your income. The U.S. Bankruptcy Code sets a specific income threshold, known as the median income for your state. If your income is below this threshold, you may qualify for Chapter 7 bankruptcy. However, if your income is above the median, you may still be eligible if you pass the “means test.” The means test evaluates your income, expenses, and disposable income to determine if you have the ability to repay a portion of your debts.
Let’s take a look at the median income limits for Chapter 7 bankruptcy in the United States as of 2021: