Can Anyone File For Bankruptcy?

Filing for Bankruptcy

Bankruptcy lawyer

In general, yes, virtually anyone can file for bankruptcy relief in one of the U.S. Bankruptcy Courts. Having said that, however, keep in mind that various types of bankruptcy have qualifications that you must meet in order to file.

Chapter 7

To file for Chapter 7, the most popular type of consumer bankruptcy, you must meet the requirements of your state’s means test. Basically, this means that your net income, after subtracting all of your qualifying exemptions, must be no more than your state’s median income for a family of your size. In California, for instance, if your household consists of four members, your annual income must be no greater than $75,111. In Mississippi, on the other hand, the annual income cutoff for a family of four is $51,140.

Chapter 11

To be eligible to file for personal Chapter 11, you must meet the following requirements:

  • Your secured debts cannot exceed $1,184,200.
  • Your unsecured debts cannot exceed $394,725.

Most often, however, Chapter 11 is reserved for businesses, both small and large, that need to reorganize.

Chapter 12

To be eligible to file for Chapter 12, you must meet the following requirements:

  • You, or you and your spouse, must be engaged in either a family farming operation or a commercial fishing operation.
  • If engaged in a family farming operation, your total farming debts, both secured and unsecured, must not exceed $4,153,150.
  • If engaged in a commercial fishing operation, your total commercial debts, both secured and unsecured, must not exceed $1,924,550.
  • If engaged in a family farming operation, at least 50% of your total debts must be related to your farm.
  • If engaged in a commercial fishing operation, at least 80% of your total debts must be related to your fishing business.
  • For either a family farming or commercial fishing operation, over 50% of your income must come from said enterprise.

Chapter 13

To be eligible to file for Chapter 13, the second most popular type of bankruptcy, you must meet the following requirements:

  • Have a regular income.
  • Have unsecured debt of no more than $394,725.
  • Have secured debt of no more than $1,184,200.
  • Be current on all your tax filings.
  • Have not had a Chapter 7 or Chapter 13 bankruptcy dismissed in the previous six months for various reasons.

Which Bankruptcy is Right For You?

Your wisest course of action when considering bankruptcy is to consult an experienced local bankruptcy lawyer such as Marty Martin Bankruptcy Law. He or she can not only fully explain your options, but also advise you of your state’s filing requirements, particularly your state’s Chapter 7 means test eligibility requirements.