Prospective Client Question:

If one’s income is more than the means test in NJ, can they still file a chapter 7? Debt is substantial (many times my income) and includes debt that is non-dischargeable. Do own home but am way behind in payments.

Answer:

The short answer is: maybe. There is a complex form used to determine if you have sufficient deductions to overcome the presumption of abuse that arises when you do not fall within the means test median income guidelines.

Of course, there are many other considerations. Does the Means Test even apply to your case? The means test only applies to cases with primarily consumer debts. If your debts are primarily business debts, the means test will not be applied to your case at all.

Should you file a Chapter 13 petition instead? Do you qualify for a Chapter 13 case? In order to file a Chapter 13 case, you must be an individual with “regular income” from employment and have no more than $1,010, 650 in secured debt and $336,900 in unsecured debt.

If there are substantial non-dischargeable debts, is it even in your best interests to file for bankruptcy? To address all the nuances of this question, it would be best to have an in person consultation.

At Karina Lucid Law, we offer free consultations to help prospective bankruptcy clients assess all of their options and determine what is in the client(s)’ best interests.

Call (908) 350-7505 for your free consultation.

This answer is offered as a public service for general information only and may not be relied upon as legal advice. No attorney-client relationship is created or is intended to be created hereby.