About the Chapter 7 Bankruptcy Means Test
Wondering If You Qualify for Chapter 7? We Can Help You Find Out.
If you find that you are unable to keep up with your monthly bills and
know that there’s no way to bring your accounts current, you may
have considered filing for Chapter 7 bankruptcy. In Florida, this debt
relief process allows debtors to declare themselves insolvent. Once all
phases of Chapter 7 are complete, you emerge free of most obligations.
However, not everyone qualifies for
Chapter 7 bankruptcy, which is why it’s always beneficial to have an experienced bankruptcy
law firm helping you through the process. Owenby Law, P.A. is exactly
that kind of law firm.
If you have considered filing for Chapter 7, you may have heard about the
"means test." This is a standard based upon the average incomes
of individuals and families in Florida. Chapter 7 of the U.S. Bankruptcy
Code mandates that all individuals must pass a state-specific means test
in order to qualify for protection under this section of the law. Our
Jacksonville bankruptcy lawyers can review your income and other financial
factors to help you determine whether or not you qualify for this chapter.
Contact Owenby Law, P.A. today for more information.
Break free from debt!
Give us a call today to find out if you qualify for Chapter 7.
How the Means Test Determines Eligibility for Chapter 7
The means test factors in the number of individuals in your household and
your family’s total income over the past six months. This is then
compared to the median income of families from around the state of Florida.
If your average monthly income over the past six months is greater than
the median, you would not qualify for Chapter 7 bankruptcy. If this is
the case, however,
Chapter 13 may still be a option. If your monthly income is below the state median,
you qualify for Chapter 7. Our lawyers can help you understand if this
chapter best fits your needs.
Means Test Example
Consider a household with two income-earning parents and three minor children
who do not work. If the parents averaged $5,000 per month over the past
six months ($30,000), that is the number that will be compared against
the median for families of that size throughout the state. Currently,
the median monthly income for a household of five is greater than the
$5,000 used in our example, so this family would qualify. Please note
that expenses are not considered in Chapter 7 means testing. The number
is based solely on income and household members.
Other Factors That Will Determine Your Eligibility for Chapter 7
bankruptcy court will consider you for Chapter 7, they will first want to determine
if you have the ability to repay your obligations. This is done by determining
if you pass the means test, which demonstrates that you are experiencing
financial hardship. We can determine whether you would likely be able
to declare bankruptcy under Chapter 7. If not, we are able to offer you
alternative solutions, including Chapter 13.
Aside from the means test, the bankruptcy could will also consider:
- If you have previously filed for Chapter 7 or Chapter 13
- If you have failed to complete mandatory credit counseling
- If you have committed any form of bankruptcy fraud
What Kind of Debts Are Dischargeable in Chapter 7 Bankruptcy?
Not all debts can be discharged under Chapter 7 bankruptcy.
Student loans, alimony, child support, and debts owed for personal injury are examples
of non-dischargeable debts. Most unsecured personal debt and obligations
acquired through credit cards are dischargeable under Chapter 7. Our caring
legal team can help you determine whether Chapter 7 will be useful with
your particular debt composition.
Find Out Which Chapter You Are Eligible to File Under
If you are considering Chapter 7 bankruptcy and feel that you need a legal
professional to help guide you through the intimidating and complex bankruptcy
process, the experienced legal team at Owenby Law, P.A. is ready and willing
to help. We are able to review your personal financial situation, determine
whether or not you will qualify, prepare the appropriate documentation,
and enroll you in credit counseling class. The Jacksonville bankruptcy
attorneys of Owenby Law, P.A. have helped numerous clients get a fresh
start through the bankruptcy process.
To schedule a
free case evaluation with a bankruptcy lawyer, call (904) 770-3141.