means test questions


P

pdsnickles

Thanks for reading my post.
Is there anyone who can answer the following questions for me:
1) Let's say the median income for my state is $50k and my wife and I
make a combined income of $49k; does that mean for sure we are eligible
for Chapter 7?
a) is the income median based on the fiscal year January to
January of the previous year? or is it based on the 12 months preceding
the day you filed, or ?

2) If our income is slightly over the median, and we have to do the
Means Test, can we legally do things to decrease our disposable income?
Such as: buy a new car with a monthly car payment? Make a monthly
charity donation? Increase my 401k contribution? buy term life
insurance? or buy a more expensive cell phone service? Are they any
other legal technicalities or tricks one can use to pass the means test
in the case that you are just slightly over the median income for your
state?

I am not trying to "rip-off" the system, it's just that I am in
financial hot water and I don't want to be turned down just because I
might be barely under the mandated income/debt calculations to qualify
for Ch. 7 bankruptcy.
 
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R

RudeDave

Thanks for reading my post.
Is there anyone who can answer the following questions for me:
1) Let's say the median income for my state is $50k and my wife and I
make a combined income of $49k; does that mean for sure we are eligible
for Chapter 7?
No. That just means you don't trigger the presumption of abuse. You still
have to show on schedule I and J that your income is consumed by your
expenses.
a) is the income median based on the fiscal year January to
January of the previous year? or is it based on the 12 months preceding
the day you filed, or ?
It's based on the six months ending on the last day of the month prior to
filing.
2) If our income is slightly over the median, and we have to do the
Means Test, can we legally do things to decrease our disposable income?
Such as: buy a new car with a monthly car payment? Make a monthly
charity donation? Increase my 401k contribution? buy term life
insurance? or buy a more expensive cell phone service? Are they any
other legal technicalities or tricks one can use to pass the means test
in the case that you are just slightly over the median income for your
state?
You can make charitable contributions. A bankruptcy lawyer can't counsel
you to take on new debt.

Frankly, if you're just over the median complete the means test. I've had a
debtor that was $10,000 over the median and she still qualified for chapter
7 based on her allowed expenses.
 
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P

pdsnickles

RudeDave said:
No. That just means you don't trigger the presumption of abuse. You still
have to show on schedule I and J that your income is consumed by your
expenses.


It's based on the six months ending on the last day of the month prior to
filing.


You can make charitable contributions. A bankruptcy lawyer can't counsel
you to take on new debt.

Frankly, if you're just over the median complete the means test. I've had a
debtor that was $10,000 over the median and she still qualified for chapter
7 based on her allowed expenses.
Thanks for the info!

I am not asking for counseling to take on new debt. I am only asking
what the rules are IF ONE DOES take on new debt, say, buying a new car
because mine is old, or getting new cellphone service because mine is
not adequate or deciding to be more giving to my church, to help others
- would those help me qualify for the means test without being seen as
abuse?
 

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