Once you determine bankruptcy is your best option, you will have to decide which type of bankruptcy to file. Chapter 7 is the most common type of bankruptcy filed by individuals in the Bronx. However, not everyone is eligible. One issue that greatly influences your eligibility is your income. To be sure you are eligible to file Chapter 7 bankruptcy in the Bronx, you should contact an experienced bankruptcy attorney and ask them to administer a “means test.”
What is a bankruptcy “means test?”
The bankruptcy “means test” is a formula designed to limit the use of Chapter 7 bankruptcy to those who cannot pay their debts. Usually, if you are a high wage earner, then Chapter 7 will not be an option. However, there are some exceptions.
Listed below are the steps involved in the bankruptcy “means test:”
- Step 1. The first step of the “means test” is to determine if your monthly income is less than the median income in your state for a household of your size. If it is, then you will be eligible to file, and you do not need to complete the rest of the test.
- Step 2. If your income is above the median state income, you will have to complete the next section of the “means test.” In this section, you will deduct your expenses from your income in order to determine if you have any disposable income. If you do have disposable income, then Chapter 13 bankruptcy, where you make one monthly payment for a set period, will likely be the route you take. If you don’t have any disposable income, you may be eligible to file Chapter 7 bankruptcy.
- Exceptions. Some exceptions are made for members of the military. You can visit the United States’ Court website for the most recent bankruptcy forms and more information on exceptions.
If you need more information about filing Chapter 7 bankruptcy in the Bronx, a knowledgeable bankruptcy attorney can help. An experienced lawyer can administer the means test and help you work out your best plan moving forward.
Bronx bankruptcy attorneys are here to help
If you are considering filing for bankruptcy in the Bronx, contact the law offices of Thomas M. Denaro Esq. today at (718) 863-6000 for a free consultation or contact us online. We have been helping clients get out of debt and reach financial stability for over 30 years.