Q: Do I need to be late on payments or in collections to file ?

A: The determination as to whether you can file for Chapter 7 bankruptcy does not take the status of your debts into account. It begins by comparing your income to the median income in your state for a household of the same size. Most people who are below the median qualify for Chapter 7 bankruptcy. If the debtor's income is above the median, a more complicated analysis is employed to determine whether or not you have sufficient disposable income to make at least some payment toward your debts on a regular basis.

A local bankruptcy lawyer can run through the means test calculation with you to tell you whether you are likely to be able to file Chapter 7 bankruptcy and get a discharge.

I would also suggest, if you don't already have one, that you retain the services of an attorney to assist you with your disability claim. Many people who are initially denied are ultimately determined to be eligible through the administrative appeals process or litigation.

*Kevin Chern is Managing Partner of UpRight Law, a national law firm with licensed attorneys providing bankruptcy and consumer legal services in all 50 states. He is an Illinois licensed attorney with 21 years of federal consumer bankruptcy and consumer protection law experience. This response is for informational purposes only and is not intended to be legal advice. For legal advice, consult an attorney licensed in your state with the appropriate expertise.