• Your ability to file for Chapter 7 bankruptcy depends on your income.Paying Bills image by ne_fall_photos from Fotolia.com
  
  The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was signed into law by President George W. Bush on April 20, 2005. This act was signed into law specifically to limit the number of bankruptcy filings. Before the law was passed, most bankruptcy debtors would attempt to file for Chapter 7 bankruptcy, which was a relatively easy and painless process. Now, with the changes to the bankruptcy laws, Florida residents can file for Chapter 7 bankruptcy only if their income levels permit.
  
  

Chapter 7

• When a Florida debtor files a Chapter 7 bankruptcy petition, he must have resided in the state of Florida 90 days before filing the petition. The debtor must also have gone to credit counseling within 180 days of filing the petition. The fee for filing Chapter 7 bankruptcy is $299 as of June 2010. After the debtor has filed his Chapter 7 petition, he must take a means test. The purpose of the means test is to ensure that a debtor who files for Chapter 7 bankruptcy truly does not have the means to pay his creditors. If the debtor does not pass the means test, it will be presumed that the debtor is trying to abuse the bankruptcy process by trying to discharge debts that he can pay.
  
  

Means Test Part 1

• To begin, you or your bankruptcy attorney will fill out means test forms that ask questions about your financial situation. Your family income will then be compared to the median family income of the state of Florida. If your family income is less than the state median, you can continue with your Chapter 7 bankruptcy case. If your family income is above the state median income for a family of your family's size, you need to continue with the means test. As of 2008, Florida median incomes were $52,259 for two-person families; $58,574 for three-person families; $69,009 for four-person families; $66,248 for five-person families; $63,759 for six-person families; and $66,941 for seven-person families or larger.
  
  

Means Test Part 2

• The next step will be to calculate your monthly disposable income and your unsecured debts. In this calculation, certain allowable monthly expenses determined by the Internal Revenue Service will be deducted from your monthly income to determine your monthly disposable income. If you are left with more than $100 of disposable income per month, and that $100 would be enough to pay more than 25 percent of your unsecured debts over a five-year period, you will more than likely fail the means test. If you would be left with less than $100 disposable income per month or your disposable income of $100 or more would not be enough to pay off $25 of your unsecured debt over a five-year period, you would likely pass the means test and be able to file for Chapter 7. The five years are factored in because the bankruptcy court would be testing to see if you would be able to complete a Chapter 13 bankruptcy repayment plan, in which you repay your creditors over a span of three to five years.