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Bankruptcy
Is there an income limit for a person to file bankruptcy?

Is there an income limit for a person to file bankruptcy?

Q: What is too much income for bankruptcy?

'Too much income' for bankruptcy varies by state and household size. If your current monthly income is above the median for your state, you may not qualify for Chapter 7 bankruptcy. You will need to undergo a means test to assess your disposable income and eligibility for Chapter 13 bankruptcy.

Q: What disqualifies you from filing bankruptcies?

Disqualifications for filing bankruptcy can include having income above the state median for Chapter 7, failing the means test, or having filed for bankruptcy within the last eight years. Additionally, certain types of debts, like recent tax obligations or child support, may affect your eligibility.

Q: Can you file bankruptcy if you have a lot of money?

Having a lot of money may disqualify you from filing for Chapter 7 bankruptcy if your income exceeds the median for your state. However, you may still file for Chapter 13 bankruptcy, which allows you to reorganize your debts based on your income and financial situation.

Full question:

Is there an income limit for a person to file bankruptcy?

Category: Bankruptcy
Date: 04/07/2025
State: Georgia

Answer:

In order to qualify for Chapter 7 bankruptcy, you must compare your "current monthly income" against the median income for a household of your size in your state. If your income is less than or equal to the median, you can file for Chapter 7. If it exceeds the median, you must pass "the means test".

The means test is designed to calculate whether you have enough disposable income, after subtracting certain allowed expenses and required debt payments, to make payments on a Chapter 13 plan. The means test involves subtracting certain allowed expenses and debt payments from your current monthly income. If the income that remains after these calculations is below a certain amount, you can file for Chapter 7.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

Can you make too much money to file bankruptcy?

Yes, you can make too much money to file for Chapter 7 bankruptcy. If your current monthly income exceeds the median income for your household size in your state, you may not qualify for Chapter 7. Instead, you would need to take the means test to determine if you can file for Chapter 13 bankruptcy.