Chapter 7 Overview

Filing a Chapter 7 bankruptcy in Las Vegas is not as scary or as daunting as most individuals might think.  First, having an experienced Las Vegas Bankruptcy Attorney can resolve the majority of an individuals anxiety.

Chapter 7 bankruptcy is a liquidation proceeding in which the debtor’s non-exempt assets, if any, are sold by the Chapter 7 trustee and the proceeds distributed to creditors according to the priorities established in the Code.  After any eligible assets have been liquidated and creditors have been paid, you would typically be discharged of all other consumer debts. After the bankruptcy discharge, you would no longer be legally responsible for repaying the debt.

In most bankruptcy case in Las Vegas, all the assets are exempt, and therefore there are no assets to liquidate and there is no dividend to creditors. Chapter 7 is generally the simplest and quickest form of bankruptcy and is available to individuals, married couples, corporations and partnerships.

The major hurdle in determining whether to file Chapter 7 is eligibility.  Eligibility to file Chapter 7 is determined by the means test instituted with the 2005 amendments to the bankruptcy code.

The  first step in figuring out whether you can file for Chapter 7 bankruptcy is to measure your “current monthly income” against the median income for a family of your size in your state (See Nevada median income). Your “current monthly income” is your average income over the last six months before you file. If your income is less than or equal to the median, you can file for Chapter 7 bankruptcy.

If your income is more than the median, however, you must pass “the means test” in order to file for Chapter 7 bankruptcy.

If you’re looking for an easy way to determine your eligibility under the Chapter 7 means test, use our online means test calculator. Once you enter your zip code, the calculator uses the applicable income and expense standards for your state, county, and region to determine your eligibility.

You’ll have to supply some income and expense information, but the calculator will save you the trouble of looking up income and expense figures for your area and doing the math. And, if you decide to file for Chapter7 bankruptcy, you can use these figures on your official paperwork (the calculator closely follows the format of the means test form, Official Form 22A, that you must complete when you file for bankruptcy).