Chapter 7 bankruptcy can be filed by both individuals and business entities, such as partnerships and corporations, under the New York Bankruptcy Code. The individual or company must then satisfy a ""means test"" that determines whether or not the debtor's filing would be ""abusive."" The means test examines the debtor's average monthly total income (all sources minus social security) for the six months preceding the bankruptcy petition. In the case of married debtors, this includes the monthly household income of the spouse, whether or not the spouse is petitioning for bankruptcy.
If the average monthly income of the debtor exceeds the median household income in New York, the monthly disposable income will be determined. Currently, the median household income in New York, per the Census Bureau, is:
• $45,931 for a one-person household • $56,113 for a two-person household • $66,953 for a three-person household • $81,212 for a four-person household
If a debtor's average monthly disposable income is excessive, he or she may not be permitted to apply for bankruptcy. In New York, it is considered """"abusive"""" for a person to file for bankruptcy if his or her disposable monthly income over the previous five years exceeds $11,725 or if he or she owes more than $7,025 in unsecured debt (representing 25% of total debt).
This means test does not apply to the following:
• Members of the Armed Forces Reserves or the National Guard who were on active duty for at least 90 days in the 540 days prior to filing bankruptcy; • Disabled veterans who are pursuing bankruptcy due to debt incurred while on active duty; • Debts of which over 50 percent are business-related; or • Members of the Armed Forces Reserves or the National Guard who were on active duty for at least 90 days in the 540 days prior to filing bankruptcy.
Certain individuals are typically ineligible to petition for Chapter 7 bankruptcy. This includes a debtor with a pending bankruptcy case within the preceding 180 days or a debtor whose bankruptcy case was dismissed following a creditor's request for an automatic stay. Also included is a debtor whose case was previously dismissed for failure to appear or comply with court orders.
However, the means test is not the sole determinant of whether a person is eligible to apply for bankruptcy. The means test establishes a rebuttable presumption regarding a person's eligibility, meaning it can be contested if the debtor has special circumstances and can demonstrate that he or she is eligible to file for bankruptcy. If the debtor does not satisfy the eligibility requirements for chapter 7, he or she may instead file for bankruptcy under chapter 13.""
" - https://www.affordablecebu.com/
