Chapter 7 is a type of Bankruptcy that should alleviate all of your debts and in most circumstances let you keep all of your property, provided that it is within the exemption limits and that you are not past due on your mortgage payments (and wish to keep your home).
In order to qualify for a Chapter 7 Bankruptcy, you must have an income that does not exceed something called the means.
The current means test limit in New York for one individual is $47,790.00. For a family of 2, the limit is $59,308.00; $69,052.00 for a family of 3 and $83,209.00 for a family of 4.
These amounts are calculated after you deduct your income taxes and several other expenses.
If you do not qualify for a Chapter 7 because you don’t meet the means test requirements or because you are trying to save your home and are behind on your mortgage, you may qualify for a Chapter 13.
That case involves the repayment of some or all of your debt over a period of time which is normally 5 years.
However, you can only qualify for a Chapter 13 if you have enough disposable monthly income to pay into a repayment plan that must be approved by the Court.
That is why most successful Chapter 13 bankruptcies involve people who had a temporary income disruption caused by either an illness, accident or temporary job loss, or those who had a one time expense.
If you’re struggling with debt, why not take a few minutes and call Zelenitz, Shapiro & D’Agostino at (718) 599-1111 to discuss your options. The call is free and there is no obligation.