Bankruptcy Eligibility: Do I Make Too Much Money?
If you are worried about whether or not you make too much money to file for bankruptcy, you should make an appointment to discuss it in detail with an experienced California bankruptcy attorney. There are some guidelines that you can consider in order to get an idea of whether or not your situation would qualify, but to get a definitive answer, you’ll need an in person discussion with an expert about bankruptcy eligibility.
Your eligibility to file for bankruptcy is determined through the Means Test. The Means Test first became a part of the bankruptcy process in 2005 when changes were made to the bankruptcy laws. The test is intended as an income barrier for individuals who want to file for Chapter 7 bankruptcy. (Chapter 7 bankruptcy gets rid of debt quickly through discharge).
Using the Means Test, your total gross income for the 6 months prior to filing for Chapter 7 will be multiplied by 2. (This provides an annual income estimate). If this number is no greater than the median income for a household of your size in your state, then you officially pass the Means Test. If your income is greater than your state’s average annual income for same size households, you do not pass and would be required to take the “full” Means Test.
Helpful info for those filing for California bankruptcy:
- California’s median income for a 1-person household is $49,185.
- California’s median income for a 2-person household is $63,745.
- California’s median income for a 3-person household is $67,817.
- California’s median income for a 4-person household is $78,150.
This is just the beginning of the process of determining if you qualify to file for a Chapter 7 bankruptcy in California. If you are actually worried about whether or not you make too much money to file, contact an expert California bankruptcy attorney at Westgate Law immediately.