Most people can qualify for bankruptcy, but not everyone needs to file for it. Depending on your financial situation, you will probably qualify for either Chapter 7 or Chapter 13. A “means” test, based on your income, is used to make that determination.
The means test reviews your income by separating those with high incomes from those that that earn less than the average income in Ohio. To complete the test, your attorney does a mathematical calculation based upon an average of your last six months of income and certain monthly expenses to find your disposable income. Monthly expenses can be determined by filling out a detailed checklist, provided by your attorney, of everything you spend money on – from utilities, to car payments to money you spend on going to the movies. Chapter 7 is geared toward those who cannot payoff their debts, so if you have little to no disposable income, there’s a good chance you’ll qualify for Chapter 7 bankruptcy.
If you can afford to make some of your monthly payments and have more disposable income, there is a good chance you will qualify for Chapter 13 bankruptcy. Chapter 13 bankruptcy is not exclusive to those who have higher incomes. If you are behind on payments to creditors and wish to keep the property, filing for Chapter 13 may be a good solution for you.