Means Test

Means Test Calculations Not Helped By Borrowing From Debtor's Own 401 K

05/29/12

The means test allows debtors an deduction and income offset for secured debt payments. The greater amount of monthly secured debt payments the more likely a debtor is to pass the means test. One of my bankruptcy clients  suggested increasing his secured debt payments by taking out a loan from his 401k retirement account. He would use the money to pay down his home mortgage.

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Self Employed Debtors Try To Manipulate Income For Means Test

04/19/12

Eligibility for Chapter 7 bankruptcy depends upon family income. An employee’s income is usually clearly determined by his payroll statements during the six months prior to filing. A self-employed debtor’s compensation from his own business typically varies month to month and is not cleanly stated on wage statements. Self-employed debtors can control their salary and distributions from their own business. I have been asked several times by self-employed debtors whether they can manipulate their income to make themselves eligible for Chapter 7.

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Bankruptcy means test: Watch out for January 2012!

09/15/11


Your bankruptcy means test may be too high if you file your bankruptcy case in January 2012.

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What is My “Current Monthly Income” and How Does it Affect My Filing of Bankruptcy?

07/27/11

Your Current Monthly Income Affects Eligibility for Chapter 7 Bankruptcy The term “current monthly income” (CMI) is an important concept in bankruptcy that courts use in several “bankruptcy tests”. For example, your “current monthly income” is important because it can effect whether you are eligible to file in a Chapter 7 bankruptcy, and in a [...]

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Can I get rid of Criminal Fines and Traffic Tickets in Bankruptcy?

07/18/11

Millions of tickets are dolled out every year, not to mention government penalties and fines.  Government tickets and fines are one of the most common forms of debt.  Can these be discharged through a bankruptcy filing?  In Chapter 7 bankruptcy, section 523(a)(7) of the Bankruptcy Code specifically states that fines and penalties owed to or [...]

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Billionaire Bankruptcies?

06/27/11

As reports surface that wealthy socialite Patricia Kluge has filed for Chapter 7 bankruptcy protection, many have wondered:  how can you file for bankruptcy when you are a billionaire? When United State bankruptcy laws were drafted, the focus was pro-debtor.  The idea was to provide a fresh start for people who had suffered under the [...]

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Improving Means Test Results By Incurring Car Debt

05/19/11

When a debtor calculates a Chapter 7 means test analysis he is entitled to deduct from income transportation expenses associated with ownership of a car. All Florida debtors can deduct from income a general transportation expense which is approximately $250. There is another deduction associated with the expense of owning a car known as the “ownership expense.” The ownership expense is calculated using the debtor’s car payment and a fixed allowance of about $500.

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