Bankruptcy is the legal process through which someone who owes more money than they can possibly repay gets rid of some of that debt. If the person qualifies, the courts can discharge their unsecured debts.
There are limitations in the law to prevent people from abusing bankruptcy proceedings. When it comes to Chapter 7 bankruptcy, which is the most aggressive form for individuals, the law limits filing to those who can pass a means test.
The means test compares an individual’s adjusted annual income to the state median income for a household of comparable size. What is the current income limitation for someone hoping to file Chapter 7 bankruptcy in New Hampshire?
The more people there are in your family, the more income you can have and still qualify
The goal in means testing is to make bankruptcy both fair to those who need its protections and to the companies that lend people money. By helping to ensure that those who potentially have the means to repay creditors will to do so, the government helps prevent abuse of bankruptcy filings.
If there is one person in your household, you can potentially qualify for bankruptcy with an adjusted income of $72,047. Households with two people can have income of up to $83,344. That goes up to $107,942 for three-person households and $129,738 for four-person families. Those with even more family members can make another $9,000 per individual and still potentially qualify for Chapter 7 bankruptcy.
If your unadjusted income is close to but over the threshold, you could still potentially qualify. Learning more about the forms of bankruptcy available for individuals, including Chapter 7, can help you determine what form is best for your needs.