Chapter 7 bankruptcy, part of the federal bankruptcy system, was established to provide a means of financial relief to American consumers who find themselves burdened by unmanageable debt.
Under Chapter 7, you receive a total discharge of your unsecured, non-priority debt. However, in order to qualify for Chapter 7, you must first meet certain statutory requirements regarding your income and ability to repay your debts.
This article will help you find out if you qualify for Chapter 7 bankruptcy.
The Chapter 7 Bankruptcy Means Test
With the exception of disabled veterans, certain members of the armed forces and consumers who have primarily business debts, everyone who desires to file bankruptcy must pass a court-administered “means test” to qualify for Chapter 7 bankruptcy in Oklahoma.
The purpose of the means test is to determine if you actually have the means to repay your debt or a portion thereof.
Firstly, to pass the means test, your disposable monthly income, which is your average monthly income for the six months preceding bankruptcy minus certain allowable expense deductions, must be less than the median household income for a household of comparable size in Oklahoma.
The current median household incomes for bankruptcy purposes in Oklahoma are as follows:
- $40,665 – single person household
- $51,575 – two person household
- $53,500 – three person household
- $64,374 – four person household (with an additional $8,100 for each individual in excess of four).
If your disposable monthly income is above the median household income for a household of comparable size in Oklahoma, you may still qualify for Chapter 7 bankruptcy if your projected disposable income over the next five years is under $6,000.
If your projected disposable income over the next five years is more than $6,000 but less than $10,000, you may yet qualify for Chapter 7 bankruptcy if your income is determined to be less than 25% of your total unsecured, non-priority debt.
If your income does not meet any of the requirements above, you will be ineligible to receive a discharge of debt under Chapter 7 bankruptcy. You may still, however, qualify for debt restructuring under Chapter 13 of the bankruptcy code.
To qualify for bankruptcy in Oklahoma, everyone except disabled veterans, certain members of the armed forces and anyone who has primarily business debt, needs to pass an economic means test to determine if they have the means to repay their debt.
In order to pass the Chapter 7 means test in Oklahoma, your disposable income must be:
1. Less than the median income of a household of comparable size in Oklahoma; or
2. Less than $6,000; or
3. Less than 25% of your total unsecured, non-priority debt and less than $10,000.
To find out if you qualify for Chapter 7, contact an experienced Oklahoma bankruptcy attorney.
Free Consultation: Stillwater Bankruptcy Attorney
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