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Archives for February 2016

The Benefit of Filing Bankruptcy Quickly if Your Income Has Increased or Is About To

To qualify for Chapter 7 "straight bankruptcy" you must pass the means test. Otherwise you would likely end up in the much more time-consuming and expensive Chapter 13 "adjustment of debts." Chapter 13 is great if you need its benefits, but not if you are forced into it and would prefer the much simpler fresh financial start of Chapter 7. Taking Advantage of the Odd Means Test Definition of "Income" The key to the means test for our purposes here is the odd and very precise way it defines … [Read more...]

Dealing with a Recent One-Time Income Event for the “Means Test”

The Chapter 7 Means Test This test was designed to screen people away from Chapter 7 "straight bankruptcy" and towards Chapter 13 "adjustment of debts." Those who could afford to pay a meaningful amount to their creditors are legally required through the means test do so under Chapter 13 instead of being allowed to discharge (legally write off) their debts under The means test looks at your income first, and then if necessary at your allowed expenses. If your income is less than the … [Read more...]

You May Not Need to Take the “Means Test” if You Are a Business Debtor

The means test is the gateway for qualifying to get a fresh financial start through a Chapter 7 "straight bankruptcy" case. This test is based first on your income. If your income—based on a very distinct way of calculating it—is not low enough, then the means test also looks at your allowed expenses, based on a complicated set of rules looking at national, regional, and local expense standards. Being able to avoid all these income and expense calculations and thus be allowed to file a … [Read more...]

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