My name is Ron Drescher. I’m an attorney practicing
bankruptcy and commercial litigation in Maryland, Delaware, Pennsylvania and Virginia, and today,
I want to answer the question: My income is above the median income for my state; can
I still qualify for ChapterÊ7? Well, the short answer to that question is
yes, maybe. The difference between being above median and below median is if you’re below
median income, you get to fill out what’s called the short form. If it’s above median,
you have to fill out the long form. This is a form that’s part of the official package
of bankruptcy forms, and when you have to fill out the long form, you’ll have to answer
a series of questions about your secured debts, whether you have health insurance, if you’re
paying for a dependent child or adult. Uh, there are a series of deductions that you
are allowed to take from your gross income in order to see if you might still qualify
for Chapter 7 relief even though your gross income is above the median income for your
state. Many of the deductions that are part of the
long form are set by statute or by the area where you live, such as, uh, a housing allowance,
a food allowance, a transportation allowance. Those things are going to be fairly set from
one person to the next. The most amount of play that you have in the long form is if
you have secure debt. If you have a home, maybe even two homes, if you have a car or
two cars and you’re paying, uh, monthly payments on that, you get to deduct that in full. So
if you’re a high income earner and you’re paying a substantial mortgage payment every
month, there’s a reasonable chance that you may still qualify for ChapterÊ7 bankruptcy.
After they fill out the long form, there’s a number that’s called your net disposable
income number, and if that number is below a certain threshold, you will still get to
file a ChapterÊ7 because when we fill out the long form and we add up all the deductions,
your net disposable income might be below the threshold or even negative, and if that’s
the case, you’ll be able to file a ChapterÊ7 bankruptcy. My name is Ron Drescher. I’m an attorney practicing
bankruptcy and commercial litigation, and if you have a question about whether you can
qualify for ChapterÊ7 bankruptcy, please pick up the phone and call me. I would love
to hear from you.