Salt Lake City Utah Bankruptcy Attorney | Qualifications
Chapter 7 Qualifications
In 2005 Congress decided that the United States Bankruptcy Code, specifically Chapter 7, was being abused. Congress found that too many people were filing for Chapter 7 bankruptcy protection to liquidate debt even though they had enough money to pay the debts back through a Chapter 13 payment plan. In response, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act in 2005.
The Means Test
As a result of the 2005 law, anyone who wishes to file for a Chapter 7 Bankruptcy must first qualify. Eligibility for a Chapter 7 bankruptcy is determined by the “means test.”
Basically, under the means test, you are eligible for a Utah Chapter 7 bankruptcy if your household income is less than the median income for another Utah family of the same size. The median income is based on U.S. census data and can be changed at any time. At the time of writing this webpage, however, the median household income for Utah is $50,568 for a one person household, $56,932 for two people, $61,905 for three people, and $69,990 for a four-person household.
If you make more than the median Utah income, then a couple of more steps are involved including determining your five-year disposable income, which if lower than $6,000 you are most likely eligible to file for a Chapter 7 bankruptcy. If your disposable income is greater than $10,000 it’s unlikely that you will be able to file for Chapter 7 bankruptcy protection. You will still be able to file under Chapter 13, however.
If your disposable income falls somewhere between $6,000 and $10,000 there are further calculations that will need to be made including what percentage your disposable income constitutes of any unsecured non-priority debt you may have.
Set Up Your Free Debt Consultation
Call theattorneys at Salcido Law Firm to schedule your free debt consultation. Our Salt Lake City bankruptcy lawyers will discuss your bankruptcy options with you and help you find the best method to get you back on the financial path to independence. Discover the benefits of filing for bankruptcy by contacting us today.
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