How Do I Qualify For a Chapter 7 Bankruptcy?
While bankruptcy is an option for all those struggling with overwhelming debt, filing for chapter 7 does have requirements. In order to qualify for chapter 7 bankruptcy one must pass a “means test.” This test considers various financial criteria such as income, expenses, and debt.
The first factor that is noted is income. If one’s income is below the Nevada median income amount then they’re automatically qualified to file for bankruptcy under chapter 7. Refer to the information below to determine how the state of Nevada determines average household income.
Total household income of the last 6 months combined
Divide by 6
= Average monthly income
Average monthly income
Multiply by 12
= Annual income
Nevada Median Annual Income by number of members in household:
1 Member Household – $41,054.00
2 Member Household – $55,349.00
3 Member Household – $55,349.00
4 Member Household – $61,732.00
5 Member Household – $69,832.00
6 Member Household – $77,932.00
7 Member Household – $86,032.00
8 Member Household – $94,132.00
9 Member Household – $102,232.00
10 Member Household – $110,332.00
If one’s income is higher than the median annual income, a “means test” will determine if you still qualify for chapter 7, based on a number of additional financial records.
Though there is a standard to qualify before filing under chapter 7, it’s not necessarily always the best option for those seeking debt relief. Learn about the difference between chapter 7 and chapter 13 bankruptcy in our recent blog or visit our Bankruptcy Law TV Youtube channel for more information on filing for bankruptcy.
To discuss your options with an experienced bankruptcy attorney, contact our office at (702) 998-1188 or info@ljlawlv.com.