Expert: Terry Leeders - 4/16/2008

Question
I live in CA and have an income over the amount allowed by the means test, aprox. 80K per year. I have close to 300,000 of unsecured debt which includes over 50,000 in personal loans to pay for a lawyer, After deducting my living expenses, using the IRS guidelines for my area, I should have aprox 50K to 60K over the 5 year period of a chapter 13, which is less than 25% of the total debt.  Would chapter 7 be an option still?   This debt mainly from one creditor and they will not settle.   I do not own a home,car or have any assets to protect.

Answer
Chapter 7 may be available, depending on your expenses, taxes, insurance etc and depending on your family size.  If you are over the median income level, it just means you are subject to the means test.  If you pass that, have no major assets, and spend everything you bring home, then Ch7 may still be an option.

You are close to going over the debt threshold for ch13, you can only have $336,900 in unsecured debt to qualify for ch13