As the fastest and simplest way to discharge your debts and reset your
financial situation to a clean slate, most people shouldering overwhelming
debt try to first file for Chapter 7 bankruptcy. If you are approved,
all the money you owe will be wiped out and creditors are no longer allowed
to pursue any sort of restitution. However, in order to qualify for Chapter
7 bankruptcy, you first need to determine your income with a means test.
The primary purpose of the Chapter 7 means test is to stop people with
high incomes or significant savings from avoiding Chapter 13 bankruptcy
payment plans. The idea is that only those in the most desperate of financial
situations should be allowed to have their debts completely eliminated.
This does not mean that you need to be penniless, though, to qualify for
Chapter 7. Rather, you typically need to be unable to repay at least 10%
or your debt in a 5-year period.
By comparing your current monthly income (CMI) to that of others with similar
family sizes in your state, the means test will determine if you are above
or below the average. If you are below, you can expect to be approved,
or at least considered, for Chapter 7 bankruptcy. If you are above, you
are not necessarily out of luck.
By claiming your actual expenses for the following, you may be able to
reduce your disposable income to a level that qualifies you for Chapter
- Charity contributions
- Child care
- Disability insurance
- Health care
- Income taxes
- Involuntary deductions
- Mandatory education
- Secured debts – mortgages, car payments, etc.
Get the Help You Need to Pass the Chapter 7 Means Test
Even though the means test is meant to be a straightforward tool to help
people from all walks of life determine if they can file for Chapter 7
bankruptcy or not, it can still seem overly complicated. Your CMI might
not accurately reflect what you actually earn each month. You could have
actual expenses that the means test doesn’t normally consider.
Whatever the reasons for your financial troubles, the team of knowledgeable
Houston bankruptcy attorneys at Maida Law Firm, P.C. believe that you
should have confidence when taking the Chapter 7 means test. Do not be
rejected due to a simple mistake, miscalculation, or oversight. When you
contact one of the firm’s lawyers for assistance, you will be backed by more than 40 years of experience
and Texas Board of Legal Specialization certified individuals.
If you live in Houston, Beaumont, or the surrounding area and want to increase
your chances of passing the Chapter 7 means test,
schedule a free consult with Maida Law Firm, P.C. today!