Why Chapter 7 Bankruptcy Can Be Difficult in Santa Rosa

Chapter 7 Bankruptcy Can Be Hard in Santa Rosa

Santa Rosa lies in the heart of the wine country.  For residents of this Northern California resort destination life can be expensive.  With rental prices easily exceeding one thousand dollars per month Sonoma County is not the most affordable area.  Unfortunately, many hard working residents of Santa Rosa fall victim to the high cost of living in Sonoma County and turn to bankruptcy for debt relief.  These very same residents who are already dismayed at the thought of bankruptcy are further crushed when they learn that they make too much money to qualify for chapter 7 bankruptcy

To qualify for chapter 7 bankruptcy a Santa Rosa resident's annualized current monthly income (the average monthly income over the past 6 months) must be below the California median family income for a household of the same size.  For residents of this expensive area with wages to offset the higher cost of living this California median threshold can be a difficult one to fall below.  As a result, many residents make what the Bankruptcy Code considers to be too much money to qualify for chapter 7 bankruptcy.  However, they can still file chapter 7 bankruptcy if they can pass the means test.

The means test is a calculation designed to determine whether filing chapter 7 bankruptcy would be an abuse in that the individual has enough money to fund a chapter 13 repayment plan.  Certain expenses can help the individual pass the means test and thereby qualify for chapter 7 bankruptcy.  Child care, tax obligations, alimony, child support, mortgages, and car payments, among other expenses can help residents of Santa Rosa pass the means test.  With that said, it is important to note that not all monthly expenses count, only certain expenses.  Therefore, if you're considering filing chapter 7 bankruptcy in Santa Rosa you should consult with a local bankruptcy attorney.

Qualifying For Chapter 7 Bankruptcy In Sonoma County

Qualifying For Chapter 7 Bankruptcy With High Income in Santa Rosa, CA

Filing for bankruptcy in Sonoma County or Sana Rosa, CA is generally similar to filing in other locations in the Norther District of California, but the relatively high average income for the County, and by extension your own high income, may be holding you back from qualifying for chapter 7 bankruptcy.  Remember, to qualify for chapter 7 bankruptcy you must pass the means test or have income below the state median for a household of your size.  Sonoma County and Santa Rosa residents may have incomes reflective of the higher cost of living in the area, and this high income may be sabotaging their eligibility for chapter 7 bankruptcy.  If your income is holding your back from chapter 7 bankruptcy here are a few things you should consider.

Talk to an experienced Santa Rosa bankruptcy attorney

An experienced Santa Rosa bankruptcy attorney can help you structure your expenses over 6 months to pass the means test in bankruptcy.  Under the means test certain expenses can be deducted.  An experienced Santa Rosa bankruptcy attorney will take an itemized list of your current expenses and tell you which expenses should become a priority and which should be decreased.

Start the process early

Many people considering bankruptcy wait until the last minute.  As soon as things become unbearable they turn to a bankruptcy attorney expecting the process to take days instead of months.  In reality, bankruptcy is best when there are a few months to prepare.

Don't hire the cheapest attorney in Santa Rosa

A cheap Sonoma County bankruptcy lawyer may just look at your situation and tell you to file for chapter 13 bankruptcy.  These attorneys may just look at your income and say "well, it's above the state median for a household of your size, so you don't qualify for chapter 7 bankruptcy."  A good bankruptcy attorney in Santa Rosa, CA will run the means test, deduct your secured debt payments and allowed expenses, and explore the possibility of increasing deductible expenses.  In short, pay a little more for an experienced bankruptcy attorney.