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BANKRUPTCY MEANS TEST
Qualifying for bankruptcy used to be a simple process. All borrowers/petitioners were eligible for the full debt relief of Chapter 7. But the Bankruptcy Code Revision of 2005 changed all that. Now, only certain below median income households are guaranteed to qualify for Chapter 7 relief.
For higher income families, the “means test” is the determining factor in qualifying for Chapter 7 full debt relief rather than Chapter 13 debt repayment. There are many circumstances where Chapter 7 eligibility is complicated, and only the knowledge of specialized counsel makes qualification for Chapter 7 relief possible.
Expert applications of the nuances of means testing by experienced counsel is often the key to the benefits of complete debt relief under Chapter 7.
The means test takes into account Internal Revenue Service (IRS) information, living expenses, income, numbers of dependents and other complex criteria in calculating eligibility for Chapter 7 relief. It is an extremely difficult and customized test of all available and actual income that requires years of legal practice and experience to interpret and apply to your fullest benefit. With hard work and practice, we have qualified thousands of middle-and upper-income Connecticut households for full Chapter 7 relief.
A properly prepared means test by our team of bankruptcy professionals at The Law Offices of Neil Crane, LLC, can be the difference between passing into Chapter 7 and being required to repay under Chapter 13.
DON’T FEAR! The first step in examining families for Chapter 7 relief is an analysis of household income from all sources over a trailing six month period. This income, doubled, becomes the determining household annual income for purposes of determining eligibility for “automatic” Chapter 7 relief with its full discharge of unsecured debt and no repayment. Family size is determined by the number of dependents listed on the prior year’s tax return. In Connecticut, the numbers are approximately:
Family of 1 - $62,000+ Family of 2 - $79,000+
Family of 3 - $90,000+ Family of 4 - $111,000+
All additional individuals - $8,400 per person
For families who are over these median numbers, the 2500 law requires a “Means Test”. This is a somewhat complicated analysis of your income and expenses over the past six months. It utilizes formulated amounts of “allowable deductions” for certain expenses and overriding “actual deductions” for certain types of monthly expenses, such as mortgage payments, car loans, support obligations and others.
Excellent practitioners know how to use the fullest extent of the law to maximize client’s utilization of both elements of the examination, “household income” and “allowable expenses.” The rules are complicated and extensive, but the key to Chapter 7 relief under the means test is good lawyering and full implementation of all aspects of means testing rules and regulations. It takes work, but it’s worth it.
Contact us today to schedule a free initial consultation. We take the time to discuss your full financial situation, understand your objectives and guide your case effectively.
Seek the advice of one of our attorneys focused on your community such as a Hamden bankruptcy qualifications attorney at any one of our offices across the state, including Hamden, Bridgeport, Waterbury, Rocky Hill and Ridgefield.
Qualifying for Chapter 7 Bankruptcy
We understand that many of our clients have several good reasons for preferring Chapter 7 bankruptcy filing over Chapter 13. If Chapter 7 is in your best interests, we want to help you get there. Chapter 7 can allow you to eliminate almost all debt, including credit card debt, medical debt, personal loans, deficiency judgments, and more. It will place an automatic stay on all debt collection activities, foreclosures, levies and garnishments.
To qualify for Chapter 7, you generally must be eligible under the means test, but every case is different. Even if your income is above the median standard, you could still qualify for Chapter 7 relief through a stringent evaluation of your income and liabilities by our experienced team of means testing attorneys.
Contact a Connecticut Bankruptcy Means Test Attorney
We offer a free initial consultation to help you determine your eligibility and evaluate the proper path in your unique situation. Call us today at 203-230-2233 or toll free at 888-249-3027, or complete our online contact form. When you call us, you will always speak to an attorney. We do not use voicemail. We are committed to providing excellent service and legal protection.
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We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.