Income Level

[john5527]

I am sure this is posted here somewhere, but I can't find an exact answer. I am considering filing bankruptcy, but is there a limit on my income that can prevent me from filing? Is it based on how much income I have left a month or how much I earn? After I pay all my expenses, I have $125 left a month paying my minimum payments. My total credit card debt is $20,000 and student loan debt is $60,000. My income is $35,000 before taxes.

[lrprn]

I am considering filing bankruptcy, but is there a limit on my income that can prevent me from filing?

There is no minimum or maximum income level or debt level for filing Ch 7.

Is it based on how much income I have left a month or how much I earn?

How much you earn from all sources of income over the last six full calendar months before you file.

After I pay all my expenses, I have $125 left a month paying my minimum payments.

Since filing Ch 7 wipes out *all* unsecured debt like credit cards, you don't get to count any unsecured payments when calculating if you have disposable income or not. Disposable income is calculated on the required Means Test and Schedules forms that are used to file Ch 7 or Ch 13.

Also when the Means Test is completed, some expense amounts are mandated by the law (what you are allowed for housing and transportation, for example). You don't get to use your actual expense figures until you get to the Schedules (if you have to fill those out).

The only exception to this is if your income is below the median income for your family size in your state. Then you fill out the first part of the Means Test only and are qualified to file Ch 7, no more questions asked.

My total credit card debt is $20,000 and student loan debt is $60,000. My income is $35,000 before taxes.

How much debt you're in and your income is not as important as how your figures come out on the Means Test and Schedules.

Are you married? Are you living with a 'significant other'? Do you have children? Do you have other income or assets besides your $35K? Which state do you live in? Do you have a car or a home you want to keep after filing?

If you can share a bit more about your situation, we can help you sort things out better.

Also just in case you didn't know, 99.99% of the time you *cannot* wipe out student loans in bankruptcy. The $60K will survive your filing and you will still have to pay those off in full plus the interest.

[john5527]

There is no minimum or maximum income level or debt level for filing Ch 7.

How much you earn from all sources of income over the last six full calendar months before you file.


Are you married? Are you living with a 'significant other'? Do you have children? Do you have other income or assets besides your $35K? Which state do you live in? Do you have a car or a home you want to keep after filing?

If you can share a bit more about your situation, we can help you sort things out better.

Thanks for sharing. I am not married. I live by myself, no children. No other income besides the $35,000 salary that I am earning. I just started a new job after being unemployed for a solid year. I live in Illinois and I rent an apartment at the present time. My only asset of value is a 6 year old car that is paid off.