Most individuals who carry consumer debt will need to submit a means test if they file for Chapter 7 bankruptcy or to determine both the amount to repay and the length of time to repay unsecured debts in a Chapter 13 bankruptcy. This means test is essentially an itemized list of your income and expenses, although there are other nuances that you might want to talk to Equal Justice Law Group attorney David Foyil about in greater detail.
Calculating a means test has six parts.
The first part looks at the debtor's current monthly income and compares it to a figure that the government calculates called the Median Family Income. This figure is determined by the Census Bureau every year. The exact figure for a specific bankruptcy case will depend on the state in which bankruptcy is being filed and the number of members of the debtor's family. You can access the most recent Median Income Schedule yourself at this link.
When calculating the means test, you will divide your income so far in the current year by the number of years that have elapsed to determine your Current Monthly Income. Then calculate your Annualized Current Monthly Income by multiplying that number by 12.
Compare your ACMI with the median income listed for your state and family size. If your ACMI is less than the Median Family Income, there is no presumption of abuse, and you may proceed with your bankruptcy filing without any further steps in the means test. If your ACMI is more than the Median Family Income, you will be required to complete the remaining steps of the Means Test. Talk to your Amador City bankruptcy lawyer for help with this.
Filing for bankruptcy can get overwhelming without experienced help. Call Equal Justice Law Group at 209-418-7504.
The means test is complex and many attorneys who do not practice bankruptcy consistently fail to understand ways in which you can legally modify expenses in order to qualify to file Chapter 7 or reduce payments in a Chapter 13. We understand what you can do to let the law work for you.