Qualifying For Chapter 7 Bankruptcy

If you are a debtor burdened with overwhelming debt and harassment by creditors, Chapter 7 bankruptcy can relieve you of your debt and get the creditors off your back. But in order to obtain relief under Chapter 7 bankruptcy, you must first meet certain statutory requirements pertaining to your income and ability to repay your debts.

To Qualify for Chapter 7 Bankruptcy in Oklahoma

In order to qualify for Chapter 7, all debtors, with the exception of disabled veterans, certain members of the armed forces and anyone who has primarily business debts, must pass a court administered “means test” to insure that they lack sufficient income to repay their debt.

In order to pass the means test, it must first be determined that your disposable monthly income — your average monthly income for the 6 months preceding filing for bankruptcy minus certain allowable expense deductions — is less than the median income for a household of comparable size in Oklahoma.

The median household incomes for bankruptcy in Oklahoma are currently:

• $40,665 – single person household

• $51,575 – two person household

• $53,500 – three person household

• $64,374 – four person household (with an additional $8100 for each individual in excess of four)

If your disposable monthly income is more than the median income for a household of comparable size in Oklahoma, you can still qualify if your projected disposable income over the next 5 years is less than $6000.

If your projected disposable income over the next five years is more than $6000 but less than $10,000, you will qualify only if it amounts to less than 25% of your total unsecured non priority debt.

Summary

All debtors, with the exception of disabled veterans, certain members of the armed forces and anyone who has primarily business debt, must pass a means test to assess their statutory eligibility  to receive a discharge under Chapter 7 bankruptcy.

To qualify, your disposable income must be:

1. Less than the median income of a household of comparable size in Oklahoma; or

2. Less than $6000; or

3. Less than 25% of your total unsecured non priority debt and less than $10,000.