Chapter 7 qulification when income below states mean income

[Kansas1960]

Our family income is below the mean income for our family for our state. In a chapter 7 is that the only qualification or do we also need to meet the expenses qualification as well? I looked through the stickies and did a search but did not find that answer.

[lrprn]

In most cases, if your total income from all sources is below your state's median income, you can file Ch 7. However, the only way to be certain is for a knowledgeable and experienced bk lawyer to complete the required B22A Means Test for you - http://www.uscourts.gov/rules/BK_For...22A_0108v2.pdf

Notice that at the end of Part III on Line 15, there's a first box to check if "the presumption does not arise". This is legalese meaning that you qualify to file Ch 7 and it won't be necessary to complete the rest of the Means Test or the Schedules. However, if your figures turn out that the second box has to be checked, then the rest of the Means Test must be completed up to Part IV Line 52 where again there's an opportunity to check "the presumption does not arise" and you can file Ch 7. If any other option has to be checked, then the Schedules must be completed to see if you have disposable income.

Remember that our government - the same people who came up with our tax forms - created this form. Don't expect anything about it to be easy to figure out on your own - that's what keeps lawyers (and most of our congresspeople are lawyers) in business.

It is possible to file Ch 7 without a lawyer (pro se) if your case is simaple and straightforward, and you are willing to do a *lot* of homework first - we had many folks here who've done it successfully (even a few with more complex cases) and I say more power to them.

However, expect that some trustees won't hesitate to take advantage of pro se filers if they think they can get away with it. Keep in mind that finding legal counsel to represent you after filing is much harder and will cost more than it would have if you'd used the lawyer to file. This is because if you need a lawyer after filing, it's because you botched the filing somehow or didn't understand the finer points of bk law (and there are a LOT of those!). Asking a lawyer to fix your original filing can be very expensive. Going pro se is not for the faint of heart!

[danaf]

you pose a good question.....and if I remember correctly one attorney I consulted said that even if I passed the means test - if I had a large amount of disposable income, it would still push me into a 13. How accurate his info was, don't know.

but common sense tells me it's about disposable income so I'd make sure my schedules didn't come up over 50-80 bucks to be sure otherwise I think I'd worry.

[MNBK7guy]

Could be a district issue in regards to disposable income. My lawyer advised me that since I was under the median, I passed the means test and therefore disposable income did not come into play and they would not challenge it in my district. I am sure they could if they really wanted to, but it seems where I am at, if you're under, you're cut and dry no presumption of abuse. My schedule J dis. income was fairly high and I had no issues.

[Kansas1960]

Thanks all for the good information. I feel a little more relaxed and less worried.