Call Now
(916) 780-7005
Click Here
Free Case Analysis
MENU
  • Spectacular!

    I liked your fast, friendly service. You were all knowledgeable in the area of bankruptcy. Your treatment of me as a client was spectacular! You were great at promptly responding to my questions and concerns. I loved that you provided courteous and quick responses to all my questions.
    --Donna
  • Highly Recommended!

    I have worked with Seth and he is the utmost professional in how he works with his clients. If you need an attorney you can trust I would highly recommend the Law Office of Seth Hanson.
    --David
  • Very Professional.

    Everyone was very professional and efficient. Seth, and everyone that I had contact with were very knowledgeable. I was very pleased with how we were treated by his staff. My questions were always answered promptly. I was very pleased with the service I received and would not hesitate to refer someone to your firm.
    --Anonymous
  • Non-judgmental.

    You were very open and answered all of my questions. You never made me feel like I was asking a dumb question. I was comfortable with your knowledge of the law. It was hard for me to make this decision to move forward in my life. Everyone was friendly to me and respectful. Non-judgmental. Every question I asked was answered promptly and appropriately. I would recommend you.
    --Anonymous
  • More Than Expected!

    I found the firm's representation to be more than what I expected. I was always kept in the loop, all my questions were answered (whether or not I asked more than once the same question), and I felt completely supported by the firm staff when going through this (at times) scary ordeal. Thank you again.
    --Joanna
  • Very Impressed!

    I liked that you had very friendly, caring staff. You were all very knowledgeable. Your treatment towards me was excellent and you quickly responded to all my concerns. If a friend asked of your overall impression, I would say that we were very impressed and we would recommend you to them.
    --Danielle

What Is The Means Test?

 

The Means Test is a crucial component in determining eligibility for Chapter 7 bankruptcy and in establishing the repayment plan in Chapter 13 bankruptcy. It helps assess whether an individual or household has enough disposable income to repay creditors. Here’s a general overview of how the Means Test is calculated:

 

Income Calculation:

Gather all sources of income, including wages, rental income, dividends, and any other sources.

Annualize income for the six months preceding the bankruptcy filing. For example, if you’re filing in June, use income from January to June.

Compare to Median Income:

Compare your annualized income to the median income for your state and household size.

Median income figures are regularly updated, and the U.S. Trustee Program publishes them. If your income is below the median, you may qualify for Chapter 7 without further Means Test analysis.

Deduct Allowable Expenses:

If your income exceeds the median, you must deduct allowable expenses to determine disposable income.

Some expenses are standardized based on IRS standards, while others may be based on actual expenses.

Disposable Income Calculation:

Subtract allowable expenses from your annualized income to arrive at your disposable income.

This amount is what could potentially be used to repay creditors in a Chapter 13 bankruptcy.

Chapter 7 Eligibility:

If your disposable income falls below a certain threshold after deducting allowable expenses, you may be eligible for Chapter 7 bankruptcy.

Chapter 13 Repayment Plan:

If your disposable income is above the threshold, you may be required to file for Chapter 13 bankruptcy.

In Chapter 13, your repayment plan will be based on your disposable income, and creditors may receive a portion of what is deemed affordable for you.

It’s important to note that the Means Test can be complex, and various factors may impact the calculations. Contact your Redding bankruptcy attorney for more information about the means test at (530) 797-4402.

 

Categorized in: