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Cc Brown Law Help You With The Bankruptcy Means Test Issues

Utah legal advice: Bankruptcy "means test" decides whether your income is low enough for you to file Chapter 7 Bankruptcy

. It's a formula designed to keep filers with higher incomes from declaring Chapter 7 bankruptcy. High income filers who flunk the means test may apply for Chapter 13 bankruptcy to repay a portion of their debts, but may not use Chapter 7 bankruptcy to wipe out their debts altogether.

However, to take the Chapter 7 means test doesn't mean that you must be penniless in order to use Chapter 7 bankruptcy. You can earn significant monthly income and still opt for Chapter 7 bankruptcy if you have a lot of expenses, such as a high mortgage payment. Here in this article we have given some tips to use the online means test calculator to decide whether you can pass the means test and, therefore, can declare Chapter 7 bankruptcy.

Chapter 7 Means Test:

The means test was designed to limit the usage of Chapter 7 bankruptcy to people those who truly can't pay their debts. It does this by deducting specific monthly expenses from your current monthly income" to arrive at your monthly "disposable income." The higher your disposable income, the more likely you won't be allowed to use Chapter 7 bankruptcy. Only bankruptcy filers with primarily consumer debts, not business debts, need to take the means test. To take the means test, you should first decide whether your income is more or less than the median income in your state. If you earn more than the median, you should figure out whether you would have enough left over, after subtracting certain expenses, to repay some of your debt.

The first step is simple, whether your current monthly income is less than the median income for a household of your size in your state, you pass. Period. You're done. So there is no need to complete the rest of the means test. You can file for Chapter 7.

For people whose household income exceeds the state median, the means test computations get significantly more complex. You should determine whether you have enough income left over, after paying your "allowed" monthly expenses, to pay off at least a portion of your unsecured debts such as credit card bills. If your disposable income adds up to more than a certain amount, you fail the means test and cannot file for Chapter 7 bankruptcy.

Median income levels vary by state and household size, and each county and metropolitan region has different allowed amounts for categories of expenses: basic necessities, housing, and transportation. But don't worry: You can get through the math with the help of an online calculator.

If you're searching for an easy way to determine your eligibility under the Chapter 7 means test, contact the Bankruptcy Professionals of CC Brown Law. We are dedicated to providing the highest quality services at a reasonable cost. Choosing the Right attorney to represent you during your case is the most important step in the Bankruptcy process. An experienced and skilled attorney will competently represent you and your financial interests against creditors and the Bankruptcy Trustee. The decisions that you and your attorney decide during your Bankruptcy will affect your financial well-being for years to come.

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by: CCBrownLaw

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