As explained by the United States Bankruptcy Court for the District of Nevada, a Chapter 7 bankruptcy is a type of bankruptcy through which “the debtor’s estate is liquidated under the rules of the Bankruptcy Code.” Also known as a ‘straight bankruptcy’, a Chapter 7 consumer bankruptcy allows for the total discharge of many (maybe all) of the filer’s debts.
Most personal bankruptcies are filed under Chapter 7. However, not everyone is eligible to file for Chapter 7 bankruptcy. There is a strict income limit. However, even if your income is higher than the limit determined by the court, you may still qualify for a Chapter 7 bankruptcy if you pass a ‘means test.’ The means test is applied by the court to determine whether despite being above the income limit you cannot afford to repay at least some of your debts through a Chapter 13 bankruptcy. Here, our Las Vegas Chapter 7 bankruptcy lawyer provides an overview of the most important things to know about the income limit to file for Chapter 7 bankruptcy in Nevada in 2022.
What is the Chapter 7 Bankruptcy Means Test?
In 2005, congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). A wide-ranging federal bankruptcy reform package, the BAPCPA created a bankruptcy means test. The law limits the number of people who are eligible to file for Chapter 7 bankruptcy (liquidation bankruptcy). A person whose income is deemed too high cannot use the Chapter 7 bankruptcy process. Instead, they are restricted to Chapter 13 bankruptcy, where you must repay all or a portion of your debts over 3 to 5 years.
Your Guide to the Chapter 7 Bankruptcy Income Limits for Nevada (2022)
The income limits to file for Chapter 7 bankruptcy are determined by the means test. Under federal bankruptcy regulations, the means test for Chapter 7 bankruptcy is applied on a state-by-state basis. To be eligible to file for Chapter 7 bankruptcy in Nevada, you must pass the state’s means test. You can do so by proving that your income is lower than the state’s median income when adjusted for the size of your family. Here are the official Nevada Chapter 7 bankruptcy means test numbers that will take effect for all bankruptcy petitions filed after May 1st, 2022:
- Household Size of 1: Annual income of $54,394.00.
- Household Size of 2: Annual income of $69,804.00.
- Household Size of 3: Annual income of $77,536.00.
- Household Size of 4: Annual income of $84,764.00.
- Household Size of 5: Annual income of $93,764.00.
- Household Size of 6: Annual income of $102,764.00.
Important: Do not assume that you are ineligible to file for Chapter 7 bankruptcy in Nevada if your income is slightly higher or somewhat higher than the state limit for the size of your household.
Some income may be excluded in determining your annual income. Additionally, you may have certain expenses that are deductible. Consult with an experienced Nevada Chapter 7 bankruptcy attorney who can help you determine if you are qualified to file for protection.
Contact Our Las Vegas, NV Chapter 7 Bankruptcy Attorney Today
At Vohwinkel Law, our Las Vegas Chapter 7 bankruptcy lawyer is committed to helping people and families resolve financial problems. If you have any questions about the Chapter 7 income limits, we can help. Reach out to us by phone at 702-735-1500 or connect with us online to arrange your strictly confidential case review. With offices in Las Vegas and Henderson, we provide Chapter 7 bankruptcy representation throughout Clark County, including in North Las Vegas, Enterprise, and Mesquite.
