Do I Qualify for Bankruptcy?

When considering filing for bankruptcy protection a common question that is asked is “Do I qualify for bankruptcy?”  The short answer is yes, you do qualify to file.  Bankruptcy protection and the right to file bankruptcy is available to everyone.  The better question to ask is “what chapter (7 or 13) do I qualify for?”

Even if you own a house or car you qualify to file bankruptcy.  Typically, using the Ohio exemptions you can protect all of your property and not lose a thing.  If you have too much equity in an item you still qualify for bankruptcy, the strategy of which bankruptcy (7 or 13) is better for you will change.  A Chapter 13 case will help you protect assets since you are creating a payment plan to pay back some of your debt.

What to Consider

The important information to look at is household income.  Quite simply, if you make too much money you will qualify for bankruptcy under chapter 13 (which includes a payment plan for 3-5 years).  If you don’t make enough money then you qualify for Chapter 7 bankruptcy.  This all depends on the average gross household income for the six months prior to the month of filing; your household size; and the median family income level for a similar household size in Ohio (assuming you live in Ohio and are filing your bankruptcy case in this state).

If you have filed bankruptcy in the past 8 years the question to ask is not “do I qualify for bankruptcy” but “am I eligible to receive a discharge?”  Also, even if you are not eligible for a discharge you still qualify to file bankruptcy you just might not obtain the benefit of receiving a discharge.

For many more bankruptcy questions answered, check out our large collection of bankruptcy FAQs.