Chapter 7 Bankruptcy Lawyer
Also referred to as “Liquidation Bankruptcy”, if approved, Chapter 7 Bankruptcy will dismiss outstanding debts. This form of bankruptcy is available to individuals and businesses with outstanding debts upon approval following the completion of the filing process, which includes means testing. Many Florida-based debtors may choose to enlist the assistance of a chapter 7 bankruptcy lawyer in Tampa, FL.
What is Chapter 7 Bankruptcy means testing?
Means testing consists of two parts, and is designed as a way for the courts to determine if you have any disposable income that could be used to pay towards outstanding debts. Typically you will work with your chapter 7 bankruptcy lawyer by providing them with current, accurate personal financial information which they will use to fill out the means testing forms. Your lawyer will then submit the forms for review.
In most cases, means testing only applies to those holding consumer debt, such as medical bills or credit card debt; one would not need to pass a means test if debt originates from a business of your own.
Household income status
The first part of means testing compares your current household income to your state’s median income. If income is below your state’s median income, you will likely pass the means test and will be able to continue the process of filing for Chapter 7 bankruptcy.
What you will need for means testing
Your lawyer will require you to gather official documentation about your income for the past 6 months. This documentation will be used as a reference point for the means test.
Major changes in your income that occurred within 6 months will be taken into consideration during the process. For example, if you were employed for 2 months, and unemployed for 4 of the 6 months, that information will be considered. Conversely, if you more recently got a job that pays more, the increase in pay will be considered.
The second component of means testing is gathering expense documentation. You must be as thorough as possible in this step, as this is where it is essential to avoid making mistakes. Small inconsistencies in expense documentation, such as duplicate charges on the same expense, are commonly a reason for cases to be discarded. Allowed expenses are based on local and national standards determined by the IRS.
- National standards – items like food and clothing
- Local standards – housing, medical expenses, and car payments.
A chapter 7 bankruptcy attorney will work with you to thoroughly evaluate and document your expenses for presentation in your application.
How a chapter 7 bankruptcy lawyer can help
Florida based lawyer, Caroline Secor P.A. is experienced in helping clients file for Chapter 7 and other forms of Bankruptcy. They will help navigate your state specific bankruptcy requirements and ensure you are providing accurate information with the goal of achieving an outcome in your favor. Contact the offices of Caroline Secor, P.A. today to request a free consultation.