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Do I Qualify For Chapter 7 Bankruptcy?

Whenever money is involved, few decisions are easy. The decision on whether you should file for Chapter 7 bankruptcy is likely to be one of the hardest and more complicated decisions you'll ever make. Because it comes with so many nuances, you should consult with knowledgeable bankruptcy lawyers in New York before filing. Law Office of Simon Goldenberg will provide you with New York bankruptcy lawyers who have decades of experience and results that you can trust. So, don't wait. Call us today at (888) 301-0584 or contact us online for a free consultation.


If you feel embarrassed that you're considering filing for Chapter 7 bankruptcy, don't. You are not alone. Each year, hundreds of thousands of Americans must file for Chapter 7 or Chapter 13 bankruptcy. In fact, in 2020, more than 522,000 Americans filed for bankruptcy. Specifically, 16,198 New Yorkers filed for Chapter 7 bankruptcy in our state. Even well-known celebrities, such as Larry King, Cyndi Lauper, Willie Nelson, and Wayne Newton, have had to file for bankruptcy at one time or another in their lives.

It may come as a surprise that, at least according to one report, only 5% of those who file for bankruptcy attribute it to reckless spending. This being the case, we must all acknowledge that every New Yorker's reasoning for filing is unique and different. But before you file, you should make sure that you qualify for Chapter 7 bankruptcy. If you don't qualify, consider speaking with one of the lawyers at our law office to learn about suitable alternatives.

The Means Test

To qualify for Chapter 7 bankruptcy filing, you must satisfy its Means Test. Bankruptcy courts put the Means Test in place to ensure that debtors did not take advantage of bankruptcy and to protect the interests of creditors. Fortunately, most people do qualify for Chapter 7 bankruptcy anyway. After all, as previously stated, famous actors, talk show hosts, and musicians have qualified for bankruptcy despite making their managers millions of dollars.


What is your household income after taxes and monthly expenses? Is it below the state's median income level? To file for this chapter, the current monthly income for your household should be equal to or below the median income for households of your same size in New York. In other words, compare your household's income to the state's household income average. From 2015 through 2019, New York's median household income was $68,486.

Your current household income is based on what you've made in the most recent six months immediately before your application. Because significant changes can occur in half a year, the means test calculator considers significant financial changes, such as losing or gaining a job during this period or incurring other expenses, such as having more mouths to feed.


Debt can come from anywhere. You may accrue high debt amounts after you divorced, a judge ordered you to pay excessive spousal support, or you lost most of your valuables. You may accrue high debt after taking out multiple student loans. Maybe you've been unemployed for a lengthy period, and the grace period of your loans has passed. Strikingly high debt can also stem from medical expenses, particularly if you or a loved one had an extended stay in a medical facility, regardless of whether you were covered by health insurance.

Whatever the reason for your debt, the means test requires that you have a significant level of debt to qualify for Chapter 7 bankruptcy. Thus, it's imperative that you document and provide proof of your monthly grocery expenses, gas expenses, personal maintenance expenses, and more, in detail.

Substantial Property

Do you own any substantial property, such as a home or vehicle? Although it's not a guarantee that you must liquidate all of your assets, you will need a decent degree of substantial property. Remember, the process of Chapter 7 bankruptcy involves liquidating your assets, and this money goes towards paying off your creditors. Any leftover amount is returned to you.

What Can Disqualify Me?

We've discussed what's necessary to qualify you for Chapter 7 eligibility, but you might be wondering if anything disqualifies you for eligibility. Yes, certain factors will disqualify you. You can't file for Chapter 7 bankruptcy if:

  • You've filed at least once in the past 180 days and
  • A bankruptcy judge dismissed your case and
  • The court dismissed it because you
    • Violated a court order
    • Filed a fraudulent report or filed a report that abused the bankruptcy system or
    • Requested a dismissal of your application.

That aside, there's no financial threshold or cap necessary to file for Chapter 7 relief. Also, you can file for it as many times as you need.

Why Do I Need A Bankruptcy Lawyer?

You should seek legal counsel before filing for Chapter 7 bankruptcy to ensure that it is the best option for you. Remember, there are other bankruptcy chapters. Although Chapter 7 is the most common of all bankruptcy cases, you shouldn't assume it is the wisest choice for your unique hardship. Also, you don't want to get looped into believing that this is in your best interest simply because you qualify. There may be other bankruptcy forms you are eligible for. Because we understand how this process can be tedious and stressful, leave it to us. Call us today for a free consultation at (888) 301-0584 or contact us online.

New York Bankruptcy Attorneys At Your Service

If you are thinking of filing for bankruptcy, Law Office of Simon Goldenberg can help you. Our experienced attorneys will thoroughly review your financial situation and advise you on meaningful solutions. To get in touch with Law Office of Simon Goldenberg, call (888) 301-0584 or contact us online.