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  1. #1

    Default High Income Chapter 7

    Does anyone have experience with a High Income Chp 7. I googled "High Income Chp 7" and a few interesting links poped up. The best one explained that the means test for Chp7 is to weed out abusers of consumer debt, like running up credit cards and hopeing to walk away. It further explained that people whose debts are primarily from a failed investment, business, or tax debts, are not subject to the means test. My potential debts would come from a real estate investment which didn't pan out, and if forelcosed i could not pay the likely deficiency judgement I'd be facing.

  2. #2
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,906

    Default Re: High Income Chapter 7

    Under the Chapter 7 means test,
    Quote Quoting Qualifying for Chapter 7 Bankruptcy Relief
    Under amendments to bankruptcy law, effective October, 2005, a two-part test is applied to determine if a debtor qualifies for Chapter 7 bankruptcy:
    1. Determination of Ability to Repay - The debtor's income is examined under a formula which exempts certain necessary expenses, such as food and rent, to determine if the debtor will be able to repay 25% of his or her "nonpriority unsecured debt".

    2. Comparison to State Median Income - The debtor's income is compared to the median state income.
    If the debtor earns in excess of the state median income, and is able to repay 25% of his or her "nonpriority unsecured debt", the debtor will be ineligible for Chapter 7 protection and must proceed under Chapter 13.

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