The Chapter 7 Means Test - Do I make too much to file?

On behalf of The Rollins Law Firm posted in Chapter 7 on Tuesday, August 21, 2012.

If you are considering filing a chapter 7 bankruptcy, you probably have heard that not everyone qualifies. In 2005, Congress added the means test requirement to the bankruptcy code. The means test is intended to weed out filers who make enough money to pay back some of their unsecured creditors. It is important that your lawyer has experience filing bankruptcy cases because the means test if incredibly complicated. Your attorney will need copies of your paystubs and a list of your monthly expenses in order to complete the form.

Some debtors qualify to file automatically because they make less than the median household income. In Mississippi, the median household income starts at $34,172.00 for a single person with no dependents up to $56,494.00 for a household of four people. If there are more than four people in your household, you can add $7,500.00 per person. These median income numbers change regularly, so you must check with the census bureau to make sure your figures are up to date.

If you make over the median income for your state, you will need to provide additional information such as how much you pay every month on secured debt, taxes, insurance and child care. Your attorney can then input this information into the formula to determine whether you will be able to file chapter 7. If you are ineligible for chapter 7, chapter 13 may still provide you with the relief you need and has its own distinct advantages. When deciding on whether to file bankruptcy there are many factors to consider so it is always best to speak with a bankruptcy lawyer to discover your options.

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