Do You Qualify For A Chapter 7 Bankruptcy

To file a Chapter 7 bankruptcy petition you are required to be a member of the lower half. When your household income exceeds the state median income for your state, you normally are not allowed to file a Chapter 7 bankruptcy. Thye median income is the cut off between the upper half and the lower half for your state in terms of gross household income. Normally you are only allowed to file a 7 if you are in the lower half. The income in question is the household income, meaning husband and wife and sometimes others. When you are single you are essentially penalized for earning the same as someone that is married. There is not much logic in the way the figures were determined. A larger household is permitted to have a larger household income. The general rule is that income determines if you can file a Chapter 7 bankruptcy, but there are several exceptions.
The bankruptcy court house where you file is the one for your district. The bankruptcy courts are part of a system of districts, and the court house where you are required to file may not necessary be the closest one. There are exceptions and requirements that complicate the process when you move. Sometimes you can only file in the district where you used to live and sometimes you can only file in the new district. You are required to live a minimal number of days in the bankruptcy court district to be able to file. If you only move once it is fairly easy to determine where you can file. When you move from you often go from one bankruptcy court district to another and depending on the number of moves sometimes 60 days will preclude you from filing in the closest bankruptcy district. These rules often have a significant impact, especially if you must recently moved and therefore helpful in planning a bankruptcy. The bankruptcy code is all federal law, but it allows state to choose exemptions from federal law or to create their own. Some states create very generous exemptions and become popular among the wealthy that are planning to file bankruptcy. In other cases it is important to know these things, because it could mean the difference between having the right to file a Chapter 7 and having to file a Chapter 13.
A Chapter 13 bankruptcy is very different from a Chapter 7 bankruptcy. A bankruptcy estate will liquidate your non exempt property, and you keep all your exempt property. The exempted property varies from state to state and is the reason why it is better to live in one state instead of another and the reason why Florida used to be a magnet for the wealthy. More often than not, when you file a Chapter 7, you keep the few things that you own and the debts are forgiven. The biggest difference between a 13 and a 7 is that in a 13 you have some or all of your debts back. After paying part of your debts back in a 13 the balance is discharged.
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