Since the new implementation of the 2005 bankruptcy law changes, any person filing a Chapter 7 bankruptcy must pass what is known as the “means test”. This test will compare your income to the median income level of Ohio to ensure that it is below that mark. If it is, then you will most likely be able to file for a Chapter 7 bankruptcy in Ohio. If is not, it may be necessary to look closer at filing a Chapter 13 bankruptcy instead.
In Ohio, your eligibility to file Chapter 7 bankruptcy is determined by comparing your annual income to the median income of the same household size. In the state of Ohio, if you are a single earner, the income limit is $43,057. For a 2- person household: $53,631. A 3-person household: $60,679, and finally a 4-person household: $76,381. If you meet the following standards, then you should speak with your bankruptcy lawyer about your debt-relief options.
When filing for a Chapter 7 bankruptcy in Ohio, there are limits to how much income that you earn. Again, if you earn more than this it doesn’t necessarily mean you won’t be able to file bankruptcy, you will just be ineligible to file for liquidation bankruptcy, but instead will most likely have to file for a “repayment” or Chapter 13 bankruptcy instead. This type of filing can actually be more beneficial to individuals who have a large amount of property that they want to keep or have substantial equity in their homes.
The state median incomes for bankruptcy is different in every state, so be sure to check the income limit for your household for your state in order to have a good grasp on whether your bankruptcy petition will be successful. Consult with an Ohio bankruptcy lawyer before moving forward to further increase your chances of success and ensure that all the proper paperwork is included in your petition.