ELIGIBILITY ATTORNEY SERVING LOS ANGELES & ORANGE COUNTY, CA
There is a lot of misinformation out there about who is eligible to file Chapter 7 bankruptcy. Credit card companies and even some inexperienced bankruptcy lawyers may tell you that you do not qualify. The truth is that most people with serious debt problems are eligible.
At the Orantes Law Firm, in Los Angeles, attorney Giovanni Orantes is dedicated to helping individuals throughout Southern California obtain debt relief by filing Chapter 7 bankruptcy. We offer a free initial consultation to determine if you are eligible.
THE CHAPTER 7 MEANS TEST
If your average monthly income over the past six months is below the California adjusted median income, then you are automatically eligible to file Chapter 7 bankruptcy. In 2011, the California median income was $48,009 for a single wage earner, $62,970 for a family of two, $68,670 for a family of three and $78,869 for a family of four. These amounts change periodically; so, do not be discouraged if you need relief. Contact us for us to determine whether you are eligible.
If your income is above the California median income, we can perform a secondary means test that considers your disposable income. This secondary means test allows you to deduct certain expenses such as mortgage payments, car payments and retirement plan contributions from your income. In some cases, simple changes such as contributing more to your 401(k) or IRA account can make you eligible to file Chapter 7 bankruptcy. Only an experienced bankruptcy attorney can give you proper guidance on how to become eligible under the secondary means test.
To be eligible to file Chapter 7 bankruptcy, you must not have filed bankruptcy and received a discharge within the past eight years. If you are not eligible to file Chapter 7 bankruptcy, you may still be able to obtain debt relief by filing Chapter 13 bankruptcy.
SOME PEOPLE MAY QUALIFY EVEN IF THEY FAIL THE MEANS TEST
If your debts are mostly “non-consumer” debts, you may still be able to qualify for Chapter 7 relief even if you would otherwise fail the means test. For example, if your debts are related to a business endeavor of most types (such as trying to start a restaurant, rental property, etc.), are mostly tax debts or student debt used for tuition and books, you may still be eligible to file for bankruptcy protection under Chapter 7 even if your income is above the State’s median. Let us help you determine if you qualify.