The answer to getting out of debt begins here
In doing your research on bankruptcy you will come across a term that everyone in Florida that is considering filing a bankruptcy will run into. It’s called “the means test”. This is something the government developed in an effort to curb the filing of so many chapter 7 bankruptcies. The way it does that is by stopping people from filing a chapter 7 bankruptcy if they make over a certain amount of money. People considering filing a chapter 7 bankruptcy will have to first pass “the means test”. The test is a formula to see how much money the person actually brings in a month. It doesn’t go by just gross income. An individual can pass the means test even if their gross income is higher then the norm, if their expenses are also high.
The means test allows the individual to deduct certain monthly expenses from their current monthly . To determine current monthly income the test takes the average of the last six months prior to filing for bankruptcy. The result is referred to as the monthly disposable income. The person has to make less then the amount stated for allowed disposable income in order to be able to file for a chapter 7 bankruptcy. The only ones that take the means test are individuals not businesses. When deciding whether you could file you will see if your income is less then the median. If it is not you must determine how much you make in disposable income after you deduct the allowable expenses to be able to repay debts. Median income levels are different from state to state. If yours is below the average then you automatically pass. If it is not then you must take the means test.
In order to pas the means test the question that you must answer is whether you have enough allowable expenses to repay your debts. This will determine if you pass the means test and are permitted to file for a chapter 7 bankruptcy. The amounts that you will be using is local as well as national standards for most living expenses instead of the actual amounts of the person. They are certain actual expenses that will be permitted to be ducted such as taxes, insurances like health, disability or life. Every person is different and so are the situations but the good thing the is that the means test evaluation takes that into consideration. If after taking the test your disposable income is low enough you will be allowed to file for a chapter 7 bankruptcy. The test is a little involved but a careful evaluation can help you pass the test.
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