The Means Test is changing as of December 1, 2014. These changes can affect your Bankruptcy petition filing. Part of the Bankruptcy Petition is the “Statement of Current Monthly Income and Means Test Calculation”. The purpose of this form is to figure out if you have enough money leftover, after your necessary expenses to repay creditors some money. If the test shows that you have enough discretionary money, then you will not qualify for Chapter 7. The form refers to this as a “presumption of abuse” (of the bankruptcy system). You may then possibly file a Chapter 13 bankruptcy, which of course has it’s own Means Test!
Each test has many pitfalls and benefits that only an experienced Bankruptcy Attorney can uncover. In some cases you can pass the Means Test even if your income is over the California Median Income. Your income is not as simple as just what you made this month, it takes into account many other factors. For the Means Test, “income” has it’s own definition. The allowable and necessary expenses can be tricky as well. Most importantly; these forms must be signed under penalty of perjury.
The experienced Attorneys at Law Office of Robert W. Fong will navigate the Means Test with you, and help you make proper decisions on what chapter to file and whether to file now or later. Call us today for a free consultation.
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