Working in Roseville? Qualifying for Chapter 7 Bankruptcy May Be Tough

If you’re employed in Roseville you may be earning a decent wage.  Nevertheless, an unexpected event or steady accumulation of consumer debt may have led you to consider bankruptcy.  For instance, divorce can lead to increased expenses including attorney fees, causing many divorce filers to contemplate bankruptcy.  When you think of bankruptcy you think of a situation where you report your property to the court knowing that valuable property will be sold and the money given to your creditors.  In exchange for this liquidation of assets you’ll receive a discharge of your debts.  This is the general framework of chapter 7 bankruptcy with the minor exception that in most cases no property is sold.  You think that this process is necessary and are ready to file chapter 7 bankruptcy.  However, before you can file you need to qualify for chapter 7 bankruptcy.

Whether you qualify for chapter 7 bankruptcy will depend upon your annualized current monthly income.  In essence, if your annualized current monthly income as determined by your average income over the past 6 months is less than the California median income for a household of your size you can file chapter 7 bankruptcy.  However, if your annualized current monthly income exceeds that amount you’ll need to pass the means test as determined by a attorney or other bankruptcy lawyer. The means test is designed to weed out individuals who can repay creditors in chapter 13 bankruptcy and allows you to deduct for certain expenses.  Car payments, mortgage payments, child care expenses, child support, alimony, and other expenses can be deducted from your income and help you qualify for chapter 7 bankruptcy.  Actual food and clothing expenses won’t help you that much even though you may spend a lot on these categories.   If you fail the means test you will not be able to file chapter 7 bankruptcy.

Many residents of Roseville who are employed do not qualify for chapter 7 bankruptcy.  The strong wages in Roseville and high rents do not help residents pass the means test.  However, residents of Roseville who have lost their job or who have experienced a disruption in income in the past 6 months may qualify.  In many cases buying a home from a Roseville real estate agent makes the difference in qualifying for chapter 7 bankruptcy since mortgage payments can be deducted in the means test.

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