The Means Test

Published on: September 6, 2011

How Long Will It Take Me to Pay Off My Debts With A Chapter 13 Bankruptcy?

When you file for Chapter 13 bankruptcy, you will pay off your debts through a Chapter 13 Plan that lasts anywhere from 3-5 years. A Chapter 13 Plan allows a debtor to catch up on most any debt, including mortgage arrearages, owed taxes, missed payments on vehicles, HOA dues, legal fees, fines owed to the city or state, and more.

Your unsecured creditors might also get some payments through the Chapter 13 Plan. If they will and how much will they receive is determined by your means test and the amount of unexempt property that you have. Any amount of unsecured debt that you have over this amount will be discharged at the successful conclusion of your Chapter 13 bankruptcy. For example, if you owe $20,000 in unsecured debt and your case only dictates that you must repay $5,000 to unsecured creditors, the $15,000 balance gets discharged or forgiven when you successfully complete your Chapter 13 Plan. If your case dictates that no money must be paid to unsecured creditors, then the entire balance of $20,000 would be forgiven.

To see how a Chapter 13 Plan would be structured for your specific situation, contact a Jacksonville Bankruptcy Attorney today for a free consultation.

Published on: September 2, 2011

My Mom Gives Me Money Every Month To Help Pay My Bills. Will I Have To Disclose This In My Bankruptcy?

By David M. Goldman

Yes. You must disclose all sources of income on your bankruptcy schedules. You can, however, put on the schedules that this support is not likely to continue in the future, but you must disclose any monies received in the prior six months from any source. Some income, however, is exempt from counting towards your Current Monthly Income calculation as reported on the means test. Some social security income, unemployment income, pension income, etc. will not count towards your Current Monthly Income. Your Ponte Vedra Bankruptcy Attorney will know how to list your income so it will be most beneficial to you. Contact us today at 904-685-1200.

Published on: September 1, 2011

If I Have A Stable Job, Can I Still Be Eligible For A Chapter 7 Bankruptcy?

By David M. Goldman

Whether or not you qualify for a Chapter 7 bankruptcy does not depend on what type of job you have, what your profession is, whether it is full-time or part-time, or whether it is seasonal employment or not. The question is not what type of job you have, but rather what your income is. To qualify for a Chapter 7 bankruptcy, your Jacksonville Bankruptcy Attorney will look at your income over the prior six months and compare it to the median income for your area. This is called the means test. If you pass the means test, your income is less than the median. If your income is over the median, then you still can qualify for a Chapter 13 bankruptcy. To see if you qualify for a Chapter 7 bankruptcy, call a Jacksonville Bankruptcy Attorney today at 904-685-1200.

Published on: August 23, 2011

More People May Qualify for Alternative Bankruptcy Options

By David M. Goldman

Supreme Court Modifies Means Testing for Certain People

When determining whether you are eligible to file a Chapter 7 bankruptcy, you usually must show that your annual household income is less than that of the average family in your area. The test that makes this determination is informally called the “Means Test”, i.e. do you have the means to pay your creditors. Being ineligible for a Chapter 7 would mean considering other Chapters for relief from debt, which may not be as favorable to your financial situation.

For the purposes of the Means Test, your annual income is calculated by taking your last six months of household income and multiplying that amount by two. By looking at your last six months of income, the court is able to estimate your projected disposable income for the next year. Because the Internal Revenue Service (IRS) considers just about any money that comes to you as income, things like disability benefits are included in the calculation of your income. This caused problems for people whose benefits ceased within the six months prior to filing because their income appears to be higher than it will be in the future.

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Published on: August 15, 2011

Will I lose My Child Support if I File For Bankruptcy?

By David M. Goldman

No, your will not lose any rights to your child support by filing for bankruptcy. You must disclose in your bankruptcy how much child support you receive. However, this child support is exempt from being taken to in order to pay your creditors (meaning it is exempt property) for any amount reasonably necessary to help support your children.

The child support that you receive is considered income for purposes of the means test. The means test is the mechanism used to determine if you qualify for a Chapter 7 bankruptcy. (If you do not qualify for a 7, you can always file for Chapter 13 bankruptcy if you meet the debt ceiling to do so.)

To find out more about child support in bankruptcy, contact a Jacksonville bankruptcy attorney today. We do free consultations, just give us a call at 904-685-1200 to schedule yours today!

Published on: August 8, 2011

Should You File Bankruptcy Before or After Divorce?

By David M. Goldman

If you and your spouse are still facing piling debt, you may be thinking about bankruptcy. However, since money issues are often the cause of divorce, you may also be thinking about splitting up as well. This dilemma leads to the question: Should you file bankruptcy now, or wait until after you split?

First, you should know that it is possible to file bankruptcy separately even if you are still married. This is often best for couples who know they are about to split and don’t think they can work well together during their joint bankruptcy. The rules differ for spouses who are still cohabitating as opposed to those who have separated, so *talk with an attorney to figure out what’s best for you.

However, if you and your spouse believe you can work together during the bankruptcy, it might make sense to file bankruptcy before your divorce. Only married couples can file jointly, and it helps keep down numerous costs. Filing bankruptcy prior to the divorce may effect alimony payments and other divisions of assets during the divorce process. Keep in mind, however, it is not always possible to discharge certain spousal payments such as alimony or child support payments in divorce. To find out which situation will be best for you, call a Jacksonville Bankruptcy Attorney.

Published on: June 27, 2011

What is the Means Test In a Florida Bankruptcy

By David M. Goldman

In order for you to begin filing bankruptcy, there is a test that is used to determine which Chapter of bankruptcy you will be allowed to file. The “Means Test” is comprised of an average income for the region of the U.S. in which you live, and your income in comparison with that average. If your income does not pass the Means Test, then you will likely have to file Chapter 13 Bankruptcy. However, if you pass the Means Test it is possible for you to file for Chapter 7 Bankruptcy, which allows a liquidation of your debts.

The Means Test was put into place so as to deter people from abusing the Bankruptcy process. No matter your income, you might want to consider filing Bankruptcy in Jacksonville if you are struggling to pay your bills and should contact a Jacksonville bankruptcy attorney to discuss your options.