As a Carol Stream bankruptcy lawyer, I would like to tell people that there is a two-pronged test in order to qualify for Chapter 7 bankruptcy. The first is that you had to be below the median income level for your household size. This changes every year but currently in Illinois, the median income level for a household size of one is approximately $46,000 per year. And the median income level for a household size of two is approximately $60,000 per year. And this will obviously increase with more children that live in your house.
So a person is determined as a member of your household as long as they live in your household. For instance, a child who goes to college and is still in school, even though they are over 18 will still be considered a member of your household for bankruptcy purposes. This can often be determined as to whether or not you will qualify for Chapter 7 bankruptcy. In the bankruptcy news, the rules and decisions are always changing. Thus, you should keep in tune with the current decisions.
The second prong of your bankruptcy test is whether or not your income is less than your expenses every month. In chapter 7 fresh start bankruptcy, like I discussed earlier, what you are saying to the court is I really have no money to pay my creditors back anything. Therefore, if you have more income every month, if you have more coming in every month, then you have going out every month, you can’t really say that. So that’s the second prong of the test. So in order to qualify for filing Chapter 7 bankruptcy, you need to be below the median income level of your household size and your expenses have to be greater than your income.
As a note, even if you are slightly above the median income level for your household size, it doesn’t mean you will not be able to qualify for Chapter 7 bankruptcy. All that will mean are you will trigger something called a Means Test. This is a very complicated mathematical equation assigned by the court that your lawyer will handle for you. But I just want to say that if you are slightly above the median income of your household size, it shouldn’t deter you from coming in and meeting with an attorney because it’s likely you will still qualify for Chapter 7 bankruptcy. Your local bankruptcy lawyer will be able to give you greater details with regard to filing for relief.