Akron & Cleveland, Ohio
If you’re considering bankruptcy then you need to file either Chapter 7 or Chapter 13 bankruptcy. However, there are some requirements to be eligible to file in Akron or Cleveland, Ohio and one of them is the Chapter 7 means test. This means test determines if your income is low enough to qualify for Chapter 7 bankruptcy and is intended to prevent people with substantial excess income (after all normal expenses) from filing Chapter 7. Should you fail the Chapter 7 means test, you may qualify for Chapter 13.
You don’t need very low income or be without a job to file Chapter 7 bankruptcy. People with regular, substantial income may qualify through the Chapter 7 means test because it takes into account their income minus their expenses. So if you have a high car payment or mortgage payment you could qualify for Chapter 7.
The Chapter 7 means test is used to determine your monthly disposable income which is the amount of money left after your normal current monthly income (an average of your income over the past six months) after certain expenses are deducted.
If your disposable income is too high according to the Chapter 7 bankruptcy laws, then you’re not permitted to file Chapter 7 and Chapter 7 and Chapter 13 is the next bankruptcy option.
Disposable Income = Current Monthly Income (an average over the past six months)
- Living Expenses and debt payments
If your income is less than the median income for a household of your size in Ohio then you do not have to determine disposable income and you automatically qualify for Chapter 7 bankruptcy.
Income, Household size
$47,582, 1 earner
$59,565, 2 people in household
$69,058, 3 people in household
$83,515, 4 people in household
*add $8,400 for each individual in excess of four.
Your current monthly income should include all of the following applicable income:
• wages, salary, bonuses, commission
• net income from rental properties
• retirement income
• net income from your business
• unemployment payments
• disability payments from the state
• workers’ compensation
• child support
*Include all taxable and non-taxable income except:
• Social Security payments
• payments to victims of war crimes
Add up all current monthly income over the past six months and divide it by six to get the average. That number is your current monthly income used to determine your Chapter 7 eligibility.
If your income varies from month to month or you just received an infrequent bonus or if your profession is built around peak seasons or long sales cycles, then your current monthly income may need to be calculated differently. If this is the case, then contact our bankruptcy attorney, Dean Paolucci, and he can help determine the average of your current monthly income.
Subtract your expenses from your monthly income to get your disposable income.
If your disposable income is less than $6000/month, you qualify for Chapter 7 bankruptcy.
If your disposable income is more than $10,000/month, you may not qualify for Chapter 7. Contact Dean Paolucci, our Akron and Cleveland bankruptcy attorney, and he can advise on next steps.
If your disposable income falls between $6000 and $10,000/month, our bankruptcy office can help with additional calculations to determine your eligibility for Chapter 7.
View and print the official Chapter 7 means test form here.
The Chapter 7 means test can be a daunting and complex series of calculations. We’re here to answer any questions you may have about qualifying for Chapter 7. We determine Chapter 7 bankruptcy eligibility daily. Contact us below and we’ll do all the calculations for you.
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