Bankruptcy Means Test in Ocala

Florida Bankruptcy Means Test

In 2005, the U.S. Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act which included, among other things, a provision that institutes a means test as a prerequisite for declaring bankruptcy under Chapter 7. The purpose of this test is to screen out people who would attempt to take an unfair advantage of the powerful legal protection provided by the U.S. Bankruptcy Code. If your income is above a certain level, you will be disqualified from filing Chapter 7 bankruptcy, and your petition will automatically be converted to a Chapter 13 case.

The means test is only required for individuals whose current monthly income is above the median income for the state where the case is being filed. This figure varies based on the number of people in the household of the bankruptcy filer. For a single person the median income in Florida is currently $41,065, for two people it is $50,711, for three people it is $53,820 and for four people it is $63,937. The test involves determining whether your aggregate current monthly income over the past five years is greater than $11,725 or 25 percent of your non-priority unsecured debt of at least $7,025. Even if you do not initially pass the test, there are several allowances which you can claim in order to reduce the figure you input into the test and thereby improve your chances of passing.

How an Ocala Bankruptcy Attorney Can Help

A large percentage of people who need and deserve the debt relief available through Chapter 7 are hindered by the means test for the simple reason that they don’t fully understand the allowances available and the procedure involved. This is only one of the reasons why you should hire an Ocala bankruptcy attorney from The Law Offices of Justin McMurray, P.A. We have more than a decade of legal experience and can guide you throughout the process to ensure that you get the most out of this opportunity to make a fresh start in life.