More people will soon be eligible to file chapter 7 bankruptcy. Effective April 1, 2017, the annualized gross income cutoff in Wyoming will be $59,974 for a single person with no children at home. The threshold amount goes up with family size ($71,971 for a married couple, $80,219 for a household size of three, $82,871 for a family of four – see U.S. Trustee Program website.)
A single dad with two children at home can have annualized gross income of up to $80,219 and still be eligible. The income limits are measured by your prior six months’ income not counting the month in which you file. Above the threshold an individual must either file a chapter 11, a chapter 13 bankruptcy or not at all.
Is filing for bankruptcy a good idea? The most common reasons that people file for bankruptcy are divorce, a serious medical event, loss of job or reduced wages. Wage garnishment is often a triggering event because it results in the immediate loss of 25% of net pay, and filing bankruptcy stops wage garnishment. Payday loans with astronomical interest rates can also be a triggering event.
As a rule of thumb, if a person can’t reasonably pay consumer debts over the next three to five years, then bankruptcy might be a good idea.
Another factor in deciding whether to file bankruptcy is what the debtor gets to keep. In Wyoming, most bankruptcy filers get to keep their vehicle, clothing, household goods, personal effects and up to three firearms. The trustee may, however, take away cash, any tax refund you have not already received and spent, sporting equipment, boats and the like. (This list is not exhaustive – consult an attorney for details.)
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We are a debt relief agency. We help people file for bankruptcy under the Bankruptcy Code.