The Means Test & Bankruptcy in Florida
Do You Qualify for Chapter 7 Bankruptcy?
Does it seem as if no matter how hard you work, you just cannot catch a
break? Are bills coming in faster than your income? If so,
bankruptcy may be the solution you need to eliminate your debts and start fresh towards
a new financial future. At Albaugh Law Firm, our knowledgeable Jacksonville
and St. Augustine bankruptcy lawyers are equipped with the knowledge and
skills to help you turn your financial situation around and get on the
road towards a debt-free future. Backed by unanimously
positive client testimonials and a 10.0 “Superb” Avvo Rating for our unmatched advocacy,
your case is sure to be in good hands.
Specifically, our team has the resources to determine if
Chapter 7 bankruptcy is the best option for your financial situation. Before filing, federal
law dictates that you must submit to a “means test,” or a
detailed analysis of your income and expenses. This test can be complex
and understandably difficult for the layperson to understand. Our attorneys
are here to answer any questions you may have and can guide you step-by-step
towards much-needed financial freedom.
Take the first step today by scheduling a
no-cost, no obligation case review.
How Does the Means Test Work?
Chapter 7 bankruptcy is the most common form of bankruptcy and involves
selling off an individual’s non-exempt liquid assets to satisfy
creditors, with any remaining unsecured debts being discharged. The means
test was created to prevent individuals from abusing this system. By taking
a closer look at a filer’s income, the means test thereby limits
access to Chapter 7 bankruptcy to only those who are truly unable to pay
their debts. This does not mean that a person needs to be completely penniless
in order to file. A person may still have a high monthly income and qualify
for Chapter 7 bankruptcy if their expenses exceed their income.
The means test requires you to answer two key questions:
- Is your monthly income below the Florida median?
- Do you have enough disposable income to pay back certain debts?
If your income is below the median for a household of your size in Florida,
you automatically pass the means test and may file for Chapter 7 bankruptcy.
If your income exceeds this median, you must then calculate just how much
disposable income you have to pay your unsecured debts. Generally speaking,
the more disposable income you have, the less likely you are to be permitted
to file for Chapter 7.
Who Is Exempt From the Means Test?
There are certain parties that are exempt from having to take the means
test. Only bankruptcy filers whose debts are primarily consumer-based,
not business-based, are required to take the means test. Other individuals
who are exempt from the means test include disabled veterans who primarily
incurred their debts during active duty service or while performing a
homeland defense activity.
I Failed the Means Test – What Now?
If you have failed the means test, do not lose hope. You may still seek
debt relief through
Chapter 13 bankruptcy, which involves reorganizing your finances and making monthly
payments to creditors over a period of three to five years. While this
method will not discharge your debts like in Chapter 7, it does not require
you to sell your assets. Furthermore, passing a means test does not necessarily
mean that you
should file for Chapter 7 bankruptcy. It is always best to consult with a knowledgeable
attorney to determine which strategy is best for your circumstances.
Reclaim Your Financial Future Today
At Albaugh Law Firm, we believe nobody should have to live life bogged
down by debt. Everyone should have the chance to start over financially,
and we have what it takes to help make this a reality for you. With more
than 70 years of combined legal knowledge, our Jacksonville and St. Augustine
bankruptcy attorneys can guide you through the process of filing for bankruptcy
and provide the powerful support you need during this time. With responsive
communication and an unshakable commitment to guarding your best interests,
your case is sure to be in excellent hands.
Call (904) 637-1839 or
contact us online today to get started.