Do I Make Too Much Money to File a Chapter 7 Bankruptcy?

If you're thinking about filing for bankruptcy in Illinois, you might be wondering: Do I make too much money to qualify for Chapter 7? It's a common question, especially for individuals and families living in Cook, Lake, DuPage, Kane, Kendall, LaSalle, Grundy, or Will County.

What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is often called “liquidation bankruptcy.” It allows you to eliminate most unsecured debts, like credit cards and medical bills, relatively quickly. But not everyone qualifies. Your income must fall below certain limits, or you must pass what’s called the means test.

What Is the Means Test?

The means test looks at your income and expenses to determine if you truly cannot afford to pay your debts. If your household income is below the median for Illinois based on your family size, you most likely qualify. But even if your income is higher than the median, you may still qualify based on your actual living expenses (like mortgage, child support, or health costs).

So, What If I Make Too Much?

If the means test shows that you have disposable income left over after your necessary expenses, you may not qualify for Chapter 7. But that doesn’t mean you're out of options.

The Benefits of Chapter 13 Bankruptcy

If you make too much money to file Chapter 7, Chapter 13 could be the better fit. Here’s why:

• You keep your property. Unlike Chapter 7, you don’t risk losing your assets.

• Debt repayment is manageable. You’ll pay back your debt over 3 to 5 years with little to no interest.

• Stop foreclosures and repossessions. Chapter 13 can help you save your home or vehicle.

• Catch up on child support or taxes. It can give you breathing room while staying compliant with court orders or IRS payments.

• Unlike debt consolidation or debt settlement plans, bankruptcy gives you legal protection from your creditors. As soon as you file, an automatic stay goes into effect—creditors must stop all collection efforts, including phone calls, lawsuits, wage garnishments, and bank levies. This powerful protection is one of the biggest advantages of filing for bankruptcy.

  
  

Talk to a Local Bankruptcy Attorney at Thurston Law Firm

If you’re in Cook County or nearby—DuPage, Will, Lake, Kane, Kendall, Grundy, or LaSalle—talk to an experienced Illinois bankruptcy attorney. We can help you understand the means test and determine whether Chapter 7 or Chapter 13 is the right path for you.