Chapter 7 Means Test Calculator By State

Bankruptcy is oftentimes a last resort financial relief option.

Photo by Mikhail Nilov, Pexels

(SALEM, Ore.) - In order to file a Chapter 7 bankruptcy, a debtor needs to pass the means test.

When an individual passes the Chapter 7 means test, they may be eligible for a Chapter 7 liquidation bankruptcy. Bankruptcy is oftentimes a last resort financial relief option for folks facing a financial hardship.

When it comes to taking the Chapter 7 means test, it’s important to understand that there are two parts to the test.

The initial part is taking a look at your total household gross income over the last 6 months and comparing it to the government means testing allowable. With that being said, it will take into account the IRS allowed expenses that will help determine qualification.

The second part of the means test will take the actual expenses of the debtor into consideration. Furthermore, some folks may find themselves qualifying above the guideline because of that.

Nevertheless, regardless if a debtor falls above or below the threshold, it’s important to understand the different parts on the Chapter 7 bankruptcy means test.

Chapter 7 Means Test Introduction

However, it's important to delineate the debtors between the individuals who may have the disposable income to pay some of the debt back from the individuals that cannot. One of the goals of the Chapter 7 test is to accomplish that delineation.

A Chapter 7 bankruptcy is a shorter term plan that costs around $338 for the filing fee. If a debtor decides to file with a bankruptcy attorney, the cost can jump to around $800 - $2,200 depending on the state you are filing, expertise of attorney, years of experience, etc.

Nevertheless, the general understanding whether a debtor may meet the income requirements for a Chapter 7 is by looking at the last 6 months of total gross income.

A debtor can utilize the Chapter 7 bankruptcy Official Form 122A to help determine Chapter 7 qualification.

The debtor will take the last full 6 months prior to file the bankruptcy case. So with that being said, if a debtor finds that their income fluctuates from month-to-month, then there may be a possibility that they may qualify for a Chapter 7 bankruptcy.

Often times when an individual does not qualify for a Chapter 7 bankruptcy then may consider Chapter 13 bankruptcy or other debt relief options.

Chapter 7 Means Test Calculator

These free calculators can be found online and can serve as a good estimator before having a free consultation with a bankruptcy.

There are a couple of types of Chapter 7 means test calculator. First, there’s a part 1 means test calculator that goes through the first part of the means test, described below. Second, there’s an above median bankruptcy calculator that considers expenses from part 2 of the means test.

The Chapter 7 means test is different by each state, so let’s go through some resources that can be helpful, and are specific to your state.

State Chapter 7 Means Test Calculator

See the list of resources below that can help you take the Chapter 7 bankruptcy means test calculator for your state.

Chapter 7 Means Test Calculator Wyoming Chapter 7 Means Test Calculator West-Virginia Chapter 7 Means Test Calculator Wisconsin Chapter 7 Means Test Calculator Washington Chapter 7 Means Test Calculator Vermont Chapter 7 Means Test Calculator Virginia Chapter 7 Means Test Calculator Utah Chapter 7 Means Test Calculator Texas Chapter 7 Means Test Calculator Tennessee Chapter 7 Means Test Calculator South-Dakota Chapter 7 Means Test Calculator South-Carolina Chapter 7 Means Test Calculator Rhode-Island Chapter 7 Means Test Calculator Pennsylvania Chapter 7 Means Test Calculator Oregon Chapter 7 Means Test Calculator Oklahoma Chapter 7 Means Test Calculator Ohio Chapter 7 Means Test Calculator New-York Chapter 7 Means Test Calculator Nevada Chapter 7 Means Test Calculator New-Mexico Chapter 7 Means Test Calculator New-Jersey Chapter 7 Means Test Calculator New-Hampshire Chapter 7 Means Test Calculator Nebraska Chapter 7 Means Test Calculator North-Dakota Chapter 7 Means Test Calculator North-Carolina Chapter 7 Means Test Calculator Montana Chapter 7 Means Test Calculator Mississippi Chapter 7 Means Test Calculator Missouri Chapter 7 Means Test Calculator Minnesota Chapter 7 Means Test Calculator Michigan Chapter 7 Means Test Calculator Maine Chapter 7 Means Test Calculator Maryland Chapter 7 Means Test Calculator Massachusetts Chapter 7 Means Test Calculator Louisiana Chapter 7 Means Test Calculator Kentucky Chapter 7 Means Test Calculator Kansas Chapter 7 Means Test Calculator Indiana Chapter 7 Means Test Calculator Illinois Chapter 7 Means Test Calculator Idaho Chapter 7 Means Test Calculator Iowa Chapter 7 Means Test Calculator Hawaii Chapter 7 Means Test Calculator Georgia Chapter 7 Means Test Calculator Florida Chapter 7 Means Test Calculator Delaware Chapter 7 Means Test Calculator District-of-Columbia Chapter 7 Means Test Calculator Connecticut Chapter 7 Means Test Calculator Colorado Chapter 7 Means Test Calculator California Chapter 7 Means Test Calculator Arizona Chapter 7 Means Test Calculator Arkansas Chapter 7 Means Test Calculator Alabama Chapter 7 Means Test Calculator Alaska

Chapter 7 Bankruptcy Means Test: Part 1

Debtors can generally utilize the Chapter 7 statement of Your Current Monthly Income to help determine potential qualification.

It’s important to note that if a debtor passes the initial part of the means test, it does not necessarily mean that they are automatically eligible to file a Chapter 7 bankruptcy.

This is because there are a couple of forms that take a look into the income and expenses of the debtor to understand the disposable income. This is generally calculated by taking your monthly income and deducting your monthly expenses.

They will use the two forms, Schedule I and Schedule J, to accomplish that calculation of your income and expenses.

However it’s important to note that if a debtor does not pass the initial test to qualify for Chapter 7, it does not mean that they are not eligible to file a Chapter 7. Sometimes folks are able to file a Chapter 7, even though they are above-median. These granularities are mostly considered in the second part of the means test.

Chapter 7 Bankruptcy Means Test: Part 2

If a debtor finds themselves above the guideline, the Chapter 7 Means Test Calculation Form can help further determine the qualification above the median. This is generally accomplished by taking a look at the expenses like, car payments, child support, health care, taxes, mortgage, etc.

For some debtors that make over the income threshold for a Chapter 7 bankruptcy, it may be helpful for them to explore the second part of the means test, as they may be able to pass the means test by deducting actual expenses.

Here are some of the different examples of potential deductions on the means test:

• Income Tax
• Health, Life, and Disability Insurance Premiums
• Auto Loan or Mortgage (Priority Secured Debts)
• Child Support and Alimony
• Childcare
• Employment Deductions (Union dues, retirement plans, uniforms, etc.)

However, there are unique circumstances where a debtor is able to deduct other living expenses like; food, clothing, personal care products, transportation costs, etc.

With that being said, there are generally limits to how much a debtor can deduct from the expenses stated. The debtor can refer to the national standards for their household size to gauge the threshold.

Conclusion

The Chapter 7 means test helps the court and debtor determine whether the debtor may qualify for a Chapter 7 bankruptcy. Then, you will be able to make an informed decision before moving forward.

Source: Salem-News.com Special Features Dept.