How do I know if I am eligible to file for Chapter 7 Bankruptcy?

Not everyone who finds themselves in a condition of financial distress can necessarily file a Chapter 7 bankruptcy case. Regular wage-earners who clearly want to stay in the home they own may be better suited for Chapter 13 and consider that option. For other individuals they should determine if they meet the eligibility requirements for filing a Chapter 7 action.


First of all, those who received a discharge of their debts within the last eight (8) years cannot file a Chapter 7 case. Nor can those who had a previous Chapter 7 bankruptcy case which was dismissed in the last 180 days because:


  • they violated a court order
  • their filing was found by the court to be fraudulent or constituted an abuse of the bankruptcy system, or
  • they sought a dismissal after a creditor asked for relief from the automatic stay.


Provided none of these impediments to filing apply, an individual seeking to file a Chapter 7 case must also meet certain income requirements.   In order to be so eligible, it is necessary to determine one’s “current monthly income” which is one’s average income over the last six months before the time of filing. If the current monthly income multiplied by 12 is less than or equal to the annual median income of the person with the same size family in your state, then the law presumes eligibility to file. In New Mexico, the current median income for individuals and those with families is as follows:


  1. Single Wage Earner: $40,222
  2. 2-Person Family:      $53,385
  3. 3-Person Family:      $53,385
  4. 4-Person Family:      $61,837


Now if one’s current monthly income causes the 12-month multiple to exceed such amounts, one must also pass the “means test” in order to meet Chapter 7’s eligibility requirements. (This topic is discussed in a separate blog here.)


In Albuquerque, Giddens & Gatton Law, P.C. has bankruptcy attorneys who offer expert handling of Chapter 7, Chapter 11, Chapter 12 and Chapter 13 bankruptcy cases and can specifically provide advice as to disposition of property in Chapter 7, Chapter 11 and Chapter 13 cases.. The New Mexico firm represents many debtors and creditors in Albuquerque, Santa Fe, Taos, Raton, Farmington, Gallup, Grants, Roswell, Los Lunas, Placitas, Belen and the rest of New Mexico. Contact Giddens & Gatton Law, P.C. at (505) 633-6298 to set up an appointment or visit the firm’s website at Giddens & Gatton Law, P.C. is located at 10400 Academy Road N.E., Suite 350 in Albuquerque, New Mexico.