Means Test Determines Chapter 7 Eligibility
Not everyone is eligible to file bankruptcy under Chapter 7 of the bankruptcy code. Eligibility is determined by a means test that compares your income to the median income in Florida. If your current monthly income is shown to be less than the adjusted state median, you are probably eligible. At our Miami law firm, Ferrer Shane, PL, we help people complete the means test and discuss the documents needed to support it.
Frequent Questions About the Bankruptcy Means Test
How is the current monthly income calculated? This number is derived from your monthly gross income for the past six months. In addition to salaries and wages from all jobs, the gross income includes gifts, income from a non-filing spouse, business income and disability payments.
What is net monthly income? If your current monthly income is greater than the state median, deductions for costs such as housing and child care are applied to the current monthly income to arrive at a net monthly income figure. If this figure is greater than a pre-determined amount that changes annually, you are not eligible for Chapter 7.
Are there any exceptions? It may be possible to request an adjustment if you have recently been ill, lost your job or experienced other financial hardships. In addition, income from Social Security is not counted. People with primarily business debts (non-consumer debt) are not required to take the means test. Members of the National Guard and Reserves are not required to take the means test while on active duty and for 540 days afterwards. Our attorneys can advise you about these and other exceptions to the means testing requirement.
Learn More About the Means Test
Contact a South Florida lawyer to learn more about filing bankruptcy. Call Ferrer Shane, PL, at 305-262-2728.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
