Individual debtors filing chapter 7 must complete form 22A. The first step is to calculate the annual salary. That consists of adding up the last six months of income and dividing by six and multiplying by twelve. If that number is beneath the “median income”, that debtor qualifies for Chapter 7.

If that number exceeds the Median Income, than there are further calculations with allowable deductions to see if the debtor may still qualify for chapter 7. The deductions are based on IRS standards.

If the debtor’s income exceeds the Median Income after all calculations are finished, then we need to consider other options to chapter 7.