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Chapter 7 Means Test
The bankruptcy attorney connecticut whether you are eligible to file Chapter 7 Bankruptcy. The means test is a formula that is designed to stop people with high income levels and/or low monthly expenses from filing Chapter 7 bankruptcy. The test was designed to ensure that Chapter 7 is only used by people who are truly unable to repay their debts.
Before taking the means test, you can determine if your income is less than the median income for your household size in your state. If your income is lower than the median income level, you are eligible for Chapter 7 bankruptcy and do not have to take the means test. If your income is higher than the median income level, you have to take the means test to see if you are eligible to file Chapter 7 bankruptcy.
The basic formula for the means test involves deducting specific monthly expenses from your average income for the six months preceding your bankruptcy. This formula will determine your monthly “disposable” income. If you have a high amount of ct bankruptcy attorney disposable income, you are unlikely to be eligible for Chapter 7 bankruptcy. Filers with higher income, and who fail the means test, may be eligible for Chapter 13 to repay part f otheir debts, but are not eligible for Chapter 7 which completely eliminates debt altogether.
You can find online versions of the means test to see if you may be eligible for Chapter 7. These tests may not always be accurate, and should not be substituted for legal advice from a bankruptcy attorney.
Chapter 13 Payment Plan Calculator
If you need to file for bankruptcy, but want to retain your assets, Chapter 13 bankruptcy may be a good option for you. Chapter 13 is a good option for people who have a consistent, reliable income. After you file a petition for Chapter 13, you must file a repayment plan within 15 days. Calculating your monthly payments under a Chapter 13 repayment plan can be complicated. First, you need to determine whether you have “priority claims” debts according to the Bankruptcy Code. Priority debts include, but are not limited to, spousal support and child support. These debts must be repaid in full and have payment priority over other types of debt.
Care must be taken when calculating ct bankruptcy attorneys. Each state may use a slightly different calculation for repayments plans, and the median income for each state is different. Chapter 13 repayment plans typically are set up for a three year or five year plan, and your disposable income each month will help to determine how much your payment will be each month, as well as the length of your repayment plan.
There are Chapter 13 repayment calculators available online. While these calculators may be helpful in getting a ballpark idea of your payments, they should not be considered as a substitute for legal advice from a bankruptcy attorney. A bankruptcy attorney in your state is the most reliable source for determining your monthly repayment amount in a Chapter 13 bankruptcy case.
