Qualifying for Chapter 7???

[BKINAZ]

This had to be asked somewhere else...I looked...couldn't find it.

Anyway...

With the means test we don't qualify for chapter 7 in our area via income level. We make too much by like $15k. (arizona) BUT...through this site and other resources it seems we can qualify for Chapter 7 through other means, how? Insolvency...? Right now with our gross income we are a couple hundred dollars in the red with our living expenses...if we trimmed some fat, we could be in the positive...(the discharged debt not included)

Where do we have to be to qualify for Chapter 7?

[keepmine]

You need enough disposable income to fund a Chapter 13 and I think that's around $200 though, most lawyers like to see it closer to $100.

[BKINAZ]

You need enough disposable income to fund a Chapter 13 and I think that's around $200 though, most lawyers like to see it closer to $100.

That's where I am confused...if I have that much, and we make more than the means test, don't they make you go to Chapter 13 then...don't you lose your having a choice?

What allows you the choice of taking 7? (thanks btw)

[keepmine]

If you have sufficent disposable income to fund a Chapter 13 plan then, that's what you qua;ify for.
Have you spoken with an attornet yet?

[BKINAZ]

yeah I have...today. Course they aren't going to take the time to go through the test now to see where we stand (first meeting)...I am just looking at getting a head start to see where we can come in and make an educated decision.

So according to you (if I understand you) we can't possibly get to chapter 7 status? If we make less than zero (disposable income) then the case gets tossed, right? If we make $100-$200 then we get bumped to 13. Is that right?

[optimistic1]

Some attorneys actually will go through the test, some just want to tell you how a bankruptcy works.

[JRScott]

You can be over the median income and still file bankruptcy.

The key is your allowed expenses to income. If this leaves you with less than 160 dollars a month then you are chapter 7, if it leaves you with more than you are chapter 13.

[fathergolf]

We were about $20,000 over the median but with our allowed expenses we qualified for chapter 7. The median income is only the first step if you fail that then you input your expenses and see what is left after that. Here is a online calculator that can give you an idea. http://www.legalconsumer.com/bankrup...test/index.php

[broken64]

I would look for a different lawyer. Mine took the time first meeting and said it would be close but even though we were slightly over the allowed amount our expenses would help us qualify for a 7. Find one that will take the time for you, this is your life and if you are that close with only a couple hundred dollars extra a month and you have to do a 13, what happens if a vehicle breaks, furnace, etc. A good lawyer will walk you through the process. Good luck to you.

[BKINAZ]

JR thanks...that gives me a little hope, FATHER thanks I will check that out now and BROKEN he was the first lawyer we saw because I wanted some quick answers. I will call him the yellow pages lawyer who "specializes" in BK. I am going to a recommended one on February 9th. I wanted two opinions anyway. But knowing he should go through it with me helps me guage what they should be doing.

Here's a question he answered yesterday and at this point I want to assume he is wrong...but he probably isn't.

I hear six months income this, six months income that...gross vs net...so in the last six months we make LESS than the median (good for chptr 7) gross...but times that out by 12 we are over. I assume the $56k (good guess) for the Median income is a 12 month income vs a 6 correct? And we do go by gross vs net? (that sucks btw)

[BKINAZ]

WHAT I JUS READ:

Ramifications of the 6-month income rule
If your income declined suddenly within the past six months and has not yet increased, waiting until after the first of the month to file will lower your monthly income figure used for the means test. That is, even if you don't qualify this month, you may qualify after the first of next month, or the month after that, if your income remains below the average monthly income for your state.

So never mind on my last question...as long as we are going GROSS...I'm screwed on this portion of the means. ($12k or so over)

[BKINAZ]

We make too much...but after taking the test (expenses) it says we passed and can go 7 or 13. Yeah.

[housepoor]

I'm glad to hear your going to meet with another attorney hopefully the next one will take the time and go over it. We had our first meeting the other day to get information and were surprised when he went over the whole means test with us. We were in and out in less than an hour so I'm not sure why any lawyer wouldn't do this. We went to see one who specialized in just bankruptcies. I was planning on going to a couple for a second and third opinion but I liked him so much and based on what I read here everything he told me is accurate so I'm not going to bother.

[BKINAZ]

What is he going to cost? I thought this first guy was kinda high...bk and a lien strip would cost us $2,750. I don't know about this second guy yet...

[biotechsolution]

What is he going to cost? I thought this first guy was kinda high...bk and a lien strip would cost us $2,750. I don't know about this second guy yet...

You can't lien strip the 2nd mortgage in a Chapter 7. So if you want to keep the house you will have to file a Chapter 13.