How is my income relevant in bankruptcy?
In a Chapter 7 Bankruptcy, income and expenses are key in determining if you qualify for Chapter 7 Bankruptcy. The Means Test is utilized to determine if your income and expenses fall below a certain threshold to qualify for Chapter 7 Bankruptcy. Keep in mind, expenses must be reasonable and necessary. If debtors has significant surplus income to repay creditors, or if eliminating unreasonable and unnecessary expenses will leave debtor with significant surplus income to repay creditors, the Bankruptcy Trustee can file a motion under 11 U.S.C. 707(b) to dismiss bankruptcy case on the ground that granting debtor a bankruptcy discharge would constitute an abuse.
If you do not qualify for Chapter 7 Bankruptcy due to your income, you can file for Chapter 13 Bankruptcy. Chapter 13 Bankruptcy, unlike Chapter 7 Bankruptcy, involves a payment plan to your creditors. This does NOT mean you have to pay back all your debt. How much you pay back depends on your income, expenses, and assets. You might end up paying as little as 1% to your creditors.
Muoi Chea Sacramento Bankruptcy Attorney will make every attempt to present income and expenses so that the Bankruptcy Trustee will not file such motion to dismiss your Chapter 7 Bankruptcy case or so that your payment plan to your creditors is the lowest it can be if you file a Chapter 13 Bankruptcy case. Muoi Chea Bankruptcy Attorney serves all of Northern and Central California including Modesto California with office locations in Sacramento, Stockton, and Fairfield, California.