How Do I Qualify for Chapter 7?

If you are thinking about filing for Chapter 7 in North Carolina. Then you may be wondering if you qualify.

Qualifying for Chapter 7 in North Carolina

The Income Requirements of Chapter 7

If you make more than the median income in North Carolina, the Means Test will examine your expenses, debt, and cost of living to determine if you can afford your current debts.

However, even if this assessment indicates that one’s earnings are not enough to pay their bills – no matter how much money they’re bringing home – as long as all other requirements for Chapter 7 bankruptcy eligibility have been satisfied then it is still possible to qualify.

A Chapter 7 is what people tend to think about when they hear the term “bankruptcy.” 

Cases are relatively short, and most people are able to keep their stuff, i.e., houses and cars.

There is an income limit that prevents higher income earners from qualifying to file a Chapter 7 that is called the “means test.” 

It is a test designed by Congress to try to weed out people who are able to afford to repay at least a portion of their unsecured debt.  For example, in North Carolina, for a household of 4, the means test limit for the household income is $90,039 per year. 

That means if a household of 4 has a yearly income of over that amount, they may not qualify for a Chapter 7. 

However, there are several factors that go into the means test, and sometimes people that make more than the means test amount are still able to qualify for a Chapter 7. 

We will determine that for you and analyze your options.

Being over the means test does not mean that you cannot file bankruptcy.  It may just limit the Chapter that you can file.

How Bankruptcy Can Help

Passing the Means Test

If you make less than North Carolina’s median income, then filing for Chapter 7 is an option likely available to you. The maximum yearly incomes for two-person households and three-person households stand at $50.7k and $55k respectively; meanwhile, four-member households are required to earn no more than $63.7k annually to be eligible.

However, earning over these thresholds does not necessarily disqualify individuals from pursuing bankruptcy through Chapter 7 – take a look at the next item – Passing the Means Test

Prior Bankruptcies

Unfortunately, if you had a Chapter 7 bankruptcy that was discharged within the past eight years, or a Chapter 13 bankruptcy that was discharged within the last six years, you will not be able to qualify for this program. However, if your debts were filed through Chapter 13 but never finalized in dischargement, then filing for chapter 7 now could provide relief from those debts. To find out more about how this might apply to your specific situation we recommend discussing it with an experienced bankruptcy attorney.

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Fraud or Abuse Allegations

If you filed a bankruptcy case in the last 180 days that was dismissed as a result of fraud, violation of court order, or request to dismiss due to creditor challenging the automatic stay, or if you haven’t completed credit counseling – then filing Chapter 7 bankruptcy may not be an option for you in North Carolina.

How Our Attorney Can Help

The experienced bankruptcy attorney at our law firm can provide you with the insight and assistance that you need to understand your rights, identify the best course of action for your unique financial situation, and determine if Chapter 7 filing is an option for you. We also offer free consultations so don’t hesitate to get in touch today.

No one should have to face financial hardship alone, and our experienced attorneys are here to make sure that you don’t have to. We understand the complexities of bankruptcy law and will do everything in our power to ensure that you get the relief you need as soon as possible. Contact us today for more information about how we can help with your Chapter 7 filing.

Call us at (704) 784-9440 or fill out the form for a free bankruptcy consultation.