Many of the clients to come to us here at Corash & Hollender, P.C. from Staten Island find that the collection efforts being taken by their creditors are only serving to drive them deeper and deeper into debt. If this describes your current situation, then you may worry that getting back on top of your finances is seemingly impossible. In such a situation, a personal bankruptcy may be your best option at getting back on your feet. Specifically, a Chapter 7 bankruptcy offers you the option to have certain debts completely discharged. Yet this is a benefit that you must qualify for.
The qualifications for Chapter 7 bankruptcy are determined by applying a means test. The details of that test are shared on the website for the Federal Judiciary. Here it states that if your current monthly income is less than that of your demographic cohort for New York, then you automatically qualify to file under Chapter 7. If it is not, then your monthly income is reviewed over a period of five years. If that amount is greater than either 25% of your non-priority unsecured debt (provided that the total amount of that debt is at least $7,700) or $12,850, then you fail the means test. This essentially means that you may be trying to abuse the privilege afforded by Chapter 7.
This may not exclude you from filing for bankruptcy, however. You can request that the bankruptcy court consider special circumstances that would consider additional expenses that should be considered in your allowed monthly expenses. If that request is denied, then you will typically be asked to convert your case into a Chapter 13 bankruptcy.
More information on Chapter 7 bankruptcy requirements can be found throughout our site.