We’ve already established several times now that bankruptcy is painful and it’s a complicated process, but it can also be a frustrating process. You see, there comes a point where you have to actually determine whether or not you’re eligible to file for bankruptcy under the chapter that you want most. When it comes to consumer credit, this is going to be Chapter 7. However, Chapter 7 is a bit picky — if you have too much income, then you’re going to have to switch over to Chapter 13. Chapter 13 still wipes the slate clean, but you’re going to have to make monthly payments for a set number of time in order to really make sure that your bankruptcy is discharged.
There are two types of means tests, actually — there’s the simple means test that you can fill out on your own. If you pass that one, you aren’t going to have to go and fill out the more detailed one with a bankruptcy attorney. This can save you a lot of time so you can figure out whether or not you’re actually eligible to file.
For the simple test, you will need to know the income you had each and every month for the last 6 months, not counting the month that you filed bankruptcy. Add that up and then multiple by two to get your annual income. You’ll need to repeat these steps if you have a spouse that has an income. So let’s say that you and your spouse have a combined income of 50,000$. That sounds like a lot of money — does that mean that you’re not going to be able to get things done with your bankruptcy case?
Not so fast. You’re going to need to also figure out the size of your household. This would include all dependents, including the people that aren’t related to you but are still supported almost completely by you. The size of your household matters because the higher it is, the more income you can actually make. This is because the bankruptcy courts do realize that just because you have a “high” income on paper doesn’t mean that you’re actually going to just be able to spend that money freely. Every area has a different cost of living average, so this also needs to be calculated in. There’s a site that lists the income cap for each and every state. If you had a 50,000 income for your household in Missouri it wouldn’t be a big deal — as long as you had 4 people. You can go to the site and look up more information for yourself, or ask your bankruptcy attorney. They can check to make sure that you do have the right numbers in front of you.
We know that this information doesn’t mean it any easier to file for bankruptcy. However, if you pass the means test in its simplest form, then you’re on your way to the clean slate that you deserve. Even if you don’t pass the simple one, there’s nothing that says you’re automatically out of the running for something more than that. You just need to make sure that you keep a constant stream of conversation with your bankruptcy attorney.
Of course, we’re already making the assumption that you’re going to hire a bankruptcy attorney, which really isn’t a bad idea at all. You just need to make sure that you’re thinking about the whole thing from start to finish and not give up on the things that you want simply because you’re hoping that everything will simply fall into place. Bankruptcy is something that has to be planned out to the letter. Little mistakes that you overlook can cost you big, especially if the assumption is made that you’re hiding something. Trustees live for busting bankruptcy cheaters, so don’t fall into that category!
You have the power to change your life through bankruptcy, and delaying isn’t going to allow you to do that? Why not get started today?