If you are considering filing for bankruptcy, you have likely heard of the
bankruptcy means test. First introduced in 2005 as part of the Congressional overhaul of bankruptcy
laws, the means test involves analyzing a person’s income and expenses
in order to determine their eligibility for Chapter 7 liquidation bankruptcy.
While many websites and books tout that a person can take a means test
themselves by simply typing a few numbers into a calculator, this is rarely
a good idea and can expose you to costly errors that can harm your bankruptcy
filing. Before you attempt to take a do-it-yourself approach for your
means test, consider the following.
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The means test is more complex than it looks: While online calculators may present the means test as a simple checklist
of sorts, in reality it is much more complicated. Bankruptcy lawyers regularly
put together and attend full seminars devoted to how to correctly complete
and apply the means test. As straightforward as an online means test form
may look, it is subject to several nuances and interpretations. For example,
when a means test asks for “household income,” do you know
what to put if you are living with roommates, relatives, or a live-in
significant other? What if you and your spouse are in the process of getting
a divorce? One mistake can lead to another, yielding incorrect results.
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You could miss out on important exemptions: Individuals who file for bankruptcy are afforded several exemptions from
their income that may be excluded from the means test, such as disability
income, crime victims’ compensation, and social security disability
insurance. Similarly, certain individuals such as those whose debts are
not primarily consumer-related or those who primarily incurred their debts
during active duty military service are similarly exempt from taking a
means test. An attorney can help ensure you include all of your allowed
exemptions when calculating your income and obligations to ensure your
means test’s result is accurate.
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The internet can be inaccurate: Many people who attempt to take their means test on their own do so in
a rush online or do so after waking up in the middle of the night worried
about their finances. This can be dangerous, as it could falsely lead
you to believe that either you are eligible for Chapter 7 bankruptcy when
you are not, or even worse, lead you to believe you are not eligible for
Chapter 7 when you are in fact a suitable candidate.
At Albaugh Law Firm, our knowledgeable St. Augustine and Jacksonville bankruptcy
lawyers can help you accurately review your bankruptcy options and guide
you towards a strategy that best fits your individual needs. Having earned
a 10.0 Superb Avvo Rating and numerous
positive client testimonials for our unmatched advocacy, we have what it takes to help you turn your
financial situation around.
Contact our office or
schedule a free consultation today to get started towards financial freedom.