Torrance Means Test Lawyer
Bankruptcy offers a path to debt relief, but Congress enacted the means test to prevent abuse of the system by higher-income individuals. This test determines if your income qualifies you for Chapter 7 bankruptcy’s debt elimination or if you must pursue a repayment plan under Chapter 13. Navigating the means test is crucial, as miscalculations could derail your bankruptcy case.
At Wadhwani & Shanfeld, our experienced Torrance means test lawyers guide you through this complex process. We analyze your finances meticulously to ensure you meet the means test criteria, giving you the best possible chance at a financial fresh start.
Eligibility for Means Test
The means test determines if your income is low enough to qualify for Chapter 7 bankruptcy’s debt elimination process. There are two main ways to meet the means test requirements.
The first is to have a household income below the median income level for a family of your size in your state. If your income falls under this median threshold, you automatically qualify to file for Chapter 7 bankruptcy relief.
However, if your income exceeds your state’s median, you still may be eligible by taking approved deductions into account. The means test allows you to deduct certain reasonable expenses from your gross income, such as:
- Housing costs (rent/mortgage, property taxes, etc.)
- Transportation expenses (car payments, insurance, operating costs)
- Food and clothing costs
- Out-of-pocket medical expenses
- Court-ordered payments (child support, alimony)
If your disposable income after these deductions is below a set amount, you can still qualify for Chapter 7. Your financial situation is unique, so an experienced bankruptcy attorney analyzes it closely.
It’s important to note that state median incomes get updated periodically, and they differ across states. So, you may qualify in one state but not another. Additionally, the means test looks at your average income over the 6 months prior to filing.
The means test is also a factor in Chapter 13 repayment plan lengths. Below-median debtors have a 3-year plan, while above-median filers typically get a 5-year repayment period.
Tips to Qualifying for the Means Test
While the means test aims to prevent bankruptcy abuse, there are lawful strategies to become eligible if your income initially exceeds the state median in Torrance. One approach is adjusting your household size. For example, if you are separated or planning to divorce, filing as an individual instead of jointly could bring you below the median income threshold.
Additionally, the timing of your bankruptcy matters. If you’ve recently experienced a job loss or reduction in work hours, delaying your filing by a few months allows you to use your lower current income for the means test calculation.
An experienced bankruptcy lawyer in Torrance is also invaluable for making approved deductions to reduce your disposable income figure. At Wadhwani & Shanfeld, our attorneys meticulously review your finances and expenses to maximize your qualified deductions and expenses under the means test formula.
Let Our Experienced Mean Test Lawyer in Torrance Help
Don’t risk miscalculating the means test on your own. Contact Wadhwani & Shanfeld to ensure you qualify. Our skilled Torrance means test lawyers will thoroughly analyze your finances and guide you through the qualification process.
