Can I still file for Chapter 7 if I make over the income limit?

If you are struggling with oppressive debt, it may be time to consider filing for bankruptcy.  Bankruptcy can offer a means for those burdened by debt to erase their debt or reorganize it so that they can start living and enjoying life again.  Those considering filing for bankruptcy will first need to consider which type of bankruptcy they qualify for and what will best suit their needs.  For individuals, Chapter 7 and Chapter 13 are the main choices.

Chapter 7 vs. Chapter 13 Bankruptcy

Chapter 7 bankruptcy, known as the liquidation chapter, allows qualifying individuals to eliminate their unsecured debt.  This form of bankruptcy will require that your non-exempt assets be sold to pay back your creditors.  Chapter 7 can allow for total elimination of your debt, but not everyone will be eligible to seek a Chapter 7 action, and those with significant assets may not wish to.

Chapter 13 bankruptcy, on the other hand, is known as the reorganization chapter.  This form of bankruptcy allows those with assets or individuals who do not meet the income limits in Chapter 7 to still pursue bankruptcy.  It will involve repayment of your debts over time.

Chapter 7 Income Limits in Ohio 

To file for a Chapter 7 bankruptcy in Ohio, you must meet the means test.  The means test will first compare your income to that of the median household income for a family of your size in Ohio.  Currently, the median income for single adults in Ohio is $48,596.  This figure will vary by year.  If you make under the median income, then you pass the means test. If you make over the median income, you could still qualify, but it becomes necessary to examine your disposable income. 

Bankruptcy courts will allow you to deduct reasonable expenses to arrive at your actual disposable income.  Allowable expenses could include living costs, household supplies, apparel, health care, and the like.  In Miami County, a filer can deduct around $750 for living costs and close to $200 for car operating costs.  The amount of disposable income you have left once these allowable expenses are deducted will determine whether you can pursue a Chapter 7 case.

Your bankruptcy lawyer will assist you in reviewing your income, expenses, and more to uncover what the best avenue for you might be when considering filing for bankruptcy.  Join the millions of Americans who have used bankruptcy to start anew by consulting with a bankruptcy lawyer today.