How much can you earn and still file chapter 7 bankruptcy?

Answer 1

Eligibility to file and benefit from a bankruptcy action under the Bankruptcy Code is not a matter of "how much you make"; although, income can affect, and be affected by, the bankruptcy action.

Title 11, United States Code, section 109, defines who may be a debtor under the Code. Central to this is the condition of insolvency, which is defined in 11 U.S.C. §101(32):

"[t]he term "insolvent" means-

(A)with reference to an entity other than a partnership and a municipality, financial condition such that the sum of such entity's debts is greater than all of such entity's property, at a fair valuation, exclusive of-

(i)property transferred, concealed, or removed with intent to hinder, delay, or defraud such entity's creditors; and

(ii)property that may be exempted from property of the estate under section 522of this title..."

Answer 2

There is not a set figure that bankruptcy courts are looking for when reviewing bankruptcy applications. Rather, they employ what is known as a "means test" in which is the first step in the application process. This is a complicated calculation that determines your ability to pay your creditors. It also compares your financial status to the average person in your area. If you pass this means test, you are allowed to file a Chapter 7 claim in Bankruptcy court - otherwise, you can only file a Chapter 13 bankruptcy claim.

Answer 3

ask a layer or banker