David M. Siegel answers in 30 seconds. Watch on YouTube · Read the transcript.
Short answer: Most people do. If you are gainfully employed and have no meaningful money left over at the end of the month, you will likely qualify for Chapter 7. The two things that can disqualify you are earning above the Illinois median income for your household size and having monthly disposable income after expenses.
The two things that matter
Chapter 7 has parameters, but they are narrower than most people fear. The test looks at two things: whether your income exceeds the median for a household of your size in Illinois, and whether you have money left over each month after reasonable living expenses.
Being over the median does not automatically disqualify you. Plenty of people earn above it and still qualify, because their necessary expenses — mortgage or rent, a car payment, childcare, health costs — leave nothing at the end of the month.
Why the median figure changes
The Illinois median income figures are published by the U.S. Trustee Program and adjusted periodically, and they differ by household size. A single filer and a family of five are measured against very different numbers.
Because the figures move, there is no useful shortcut here. We run your actual numbers against the current schedule rather than guessing from a table you found online.
If you do not qualify, you are not out of options
Failing the means test is not the end of the conversation. It usually means Chapter 13 is the right chapter instead — you repay a portion of your debt over three to five years at a payment tied to what you can afford, and you keep your property.
For a lot of people that turns out to be the better outcome anyway, particularly if they are trying to save a home or catch up on a vehicle.
What a consultation actually settles
In one conversation we work out which chapter you qualify for, which of your debts can be eliminated and which cannot, whether your home and vehicle are protected under Illinois exemptions, what the filing will cost, and what the payment plan looks like.
It is free, and you leave knowing where you stand instead of guessing.
Want to know whether you qualify?
The consultation is free and there is no obligation. You will find out
what you qualify for, which debts can be eliminated, what it costs, and what the payment plan looks like.
Wheeling: (847) 520-8100
South Chicago: (773) 276-6969
Also serving Joliet, Westchester, and Cook, Lake, Will and DuPage counties.
Full transcript of the video
do I qualify for Chapter 7 Chapter 7 known as the Fresh Start bankruptcy does have some parameters if you’re making more than the median and you have available money per month then you might not qualify for Chapter 7 that’s why we offer a free consultation to find out whether or not you qualify and then exactly how it all works for you Chapter 7 is the fresh start there are some qualifications but for most people if they’re gainfully employed and they don’t have extra money per month they will likely qualify for the Chapter 7 fresh start
Related questions
- Chapter 7 vs Chapter 13: what is the difference?
- How long does a Chapter 7 case take?
- How much does it cost to file?
About the author. David M. Siegel has represented consumer bankruptcy clients in the Northern District of Illinois since 1991 and is the author of several books on consumer bankruptcy. His offices are in Wheeling, South Chicago, Joliet and Westchester.
This article is general information about Illinois and federal bankruptcy law. It is not legal advice, and reading it does not create an attorney-client relationship. Every case turns on its own facts — speak with an attorney about yours.
