WE ARE OVERWHELMED WITH CREDIT CARD DEBT SINCE MY WIFE WAS OUT ON MATERNITY LEAVE FOR 3 MONTHS. HOWEVER, WE OWN OUR HOME AND SINCE SHE’S BACK TO WORK WE EARN $120,000 PER YEAR. ARE WE ELIGIBLE FOR CHAPTER 7?
On April 1, 2018, the new means test numbers came out which set the presumptive numbers for eligibility for chapter 7. Please note, even if you earn an income that is above the median income, you still may be eligible to file Chapter 7 after you take all the deductions.
The new numbers in New Jersey are as follows:
1) Family of 1 – $66,284
2) Family of 2 – $81,054
3) Family of 3 – $98174
4) Family of 4 – $121,226
You can add an additional $8,400 for each additional family member.
In calculating the means test, you must include all income you received in the last 6 months, with a few exceptions. That we will go over in my office. Thus, you cannot just go by the salary since if you had a lot of overtime in the last 6 months or you are a teacher who doesn’t work during the summer, it could dramatically affect the means test. However, Mr. Taieb will go over everything with you in detail.
The one thing that is essential to emphasize is that even if you beat the means test and are eligible for Chapter 7, if you are above the bankruptcy exemptions by having non-exempt equity, a Chapter 7 trustee can sell that property or you would have to buy out the Chapter 7 trustee. Thus, you want to be careful before you file a Chapter 7 since you have to look at the whole picture.
Thus, if you have no non-exempt equity, are current on all your secured obligations, and are under the median income, then you should file Chapter 7.
If you have any questions concerning this matter or any other matter contact TAIEBLAW at 856-235-4994.
Steven N. Taieb, Esq. is here to help you and is a South Jersey Bankruptcy Attorney who has helped over 7000 people with their financial problems for the past 33 years and is board certified in consumer bankruptcy law by The American Board of Certification which is accredited by The American Bar Association.
We are more than happy to discuss all your options and to see if bankruptcy is the best option for you.