Say Goodbye to Debt
So in this second video, let’s talk about number one, what’s my income? So Chapter 7 is considered a liquidation bankruptcy, so basically, this is we’re going to walk away and all of those debts are going to be gone. This is the Chapter that you want to do. If you can qualify for it. Well, how do you qualify for it? Well, you can only do one every eight years, so that’s a threshold issue, but I won’t count that as one of the three.
The main thing in terms of qualification is your income, and it goes by your household size. Every year, the IRS, or actually usually quarterly or at least a couple of times a year, the IRS puts out updated standards for median income, meaning what’s the poverty line, what’s middle income? So for a family of one right now, for example, you’re looking at the mid to upper $40,000 a year, that’s considered the median income. Below that, you’re under the median, and above that, you’re over the median and we use this for the cutoff for Chapter 7.
So it’s not as simple as what you make, it’s how many are in your household, and a lot of things can go into that calculation. Maybe you live with four people, but you have a separate household, you all each are renting and maintaining a separate household, or maybe you have grandma living with you but she pays you rent. So she’s not part of your household, but you do get a little income from her. Or maybe she is part of your household and doesn’t have income.
So you add about $10,000 for each additional person, so I said mid-forties, low-fifties, somewhere in there for a family of one. So we go to mid-fifties, low sixties for a family of 2. $70,000, $80,000, and so forth as we go up in household size. So the more kids you have, obviously they’re not adding income into the equation, so they’re going to raise the amount of income you can make.
So if you have kids, you’re probably more likely to qualify, but they’re pretty generous with these guidelines so you don’t have to be on skid road to qualify for one person, if you’re making $36,000 a year, you still qualify easily. So that’s the first calculation, what’s your income? Are you under or over? If you’re over, your expenses, for example, if you have an astronomical mortgage, a high car payment for things that you’re going to keep in bankruptcy, can bring you back down. So that’s factor one, your income in Is Chapter 7 right for me?
As always, I am Edward Kelley, a chapter 7 lawyer in OKC. You can reach me at Edward Kelley Law, that’s kelleylaw@gmail.com, or give me a call at (580) 478-3130. You can also reach out to me at oklahomacitybankruptcyattorney.pro.