Experienced Bankruptcy Lawyer in Cherry Hill
What Is the Bankruptcy Means Test and How Does It Work?
Before you can file Chapter 7 bankruptcy, you generally are required to pass the means test. Stated simply, to pass the means test, you must show that your monthly income is less than the median income for households of the same size or, if your income is greater than the median income, that you have enough expenses to still qualify. Many people have misconceptions about the means test, and put off filing for bankruptcy as a result. At the Law Office of Fred Braverman, we will do more than just help you complete the bankruptcy means test. His in-depth knowledge of the law may enable you to qualify to file Chapter 7 bankruptcy or find another debt relief option that achieves your most important goals.
How Do You Find Out if You Pass the Means Test?
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Your first step is to calculate your average monthly income over the past six months. You then compare this to households of the same size in your state. The most recent numbers for annual household incomes are below.
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New Jersey
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One person — $61,243
Two people — $71,994
Three people — $90,863
Four people — $107,452
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Add $8,100 for each additional person in a household.
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If your income falls below these levels, then you pass the means test. Even if it does not, you may still be able to pass the means test and file Chapter 7 bankruptcy. The next step will be to calculate and add up your expenses. After this, if your income falls below a certain level, you can file for Chapter 7 bankruptcy.
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We encourage you to get in touch with us if you believe your income is too high to file Chapter 7 bankruptcy — or even if another lawyer has told you Chapter 13 is your only option. We will carefully assess your overall financial situation, asking the right questions and accounting for all loans, payment and other obligations. We are also adept at creating Chapter 13 plans that eliminate substantial debt and require manageable monthly payments.