Overwhelmed by credit card debt? Have you racked up enormous medical bills? The best solution may be to file for bankruptcy. To qualify for this, you may need to pass a bankruptcy means test. That’’s where our bankruptcy attorney comes in! We can assist families in being equipped to pass the New Jersey means test.
Karina Lucid Law helps clients with Chapter 7 and Chapter 13 bankruptcies. Call our New Jersey bankruptcy law firm to get more information regarding our bankruptcy services.
What is a Bankruptcy Means Test?
The bankruptcy means test determines whether an individual qualifies for bankruptcy. It involves multiple factors, such as the state’s median household income, your disposable income, and the necessary expenses.
The means test is intended to sniff out the debtors who abuse the bankruptcy system. Debtors are deemed to have been potentially misusing this system when they choose to file for bankruptcy when, in fact, they are equipped to pay off their debts.
Chapter 7 Bankruptcy
Chapter 7 is also called liquidation bankruptcy. Most people who file for this bankruptcy in the state get to keep certain assets. Non-exempt properties may be taken away from debtors to settle their debts.
The other basis that enables debtors to pass the bankruptcy means test for Chapter 7 is when their current household income exceeds their median income. Debtors can pass the test on this criterion, given that their expenses may be deductible. A means of making the necessary computation for these scenarios is utilizing the New Jersey bankruptcy means test calculator.
You can ask our qualified New Jersey bankruptcy attorney if you need help with your Chapter 7 case.
Chapter 13 Bankruptcy
In New Jersey, Chapter 13 bankruptcy is referred to as the wage earners’ plan. Filing for Chapter 13 bankruptcy usually entitles the debtors to retain their assets. Debtors do not need to be eligible to apply for Chapter 13 bankruptcy as long as their debts are in amounts below the limits. If debtors file for Chapter 13 100%, the terms of their payment plans may be shorter in tenure.
There is no means test required for Chapter 13 petitions!
If you need help with your Chapter 13 bankruptcy petition, Karina Lucid Law is here to help you out!
How Does the Means Test Work?
As mentioned, the means test usually determines eligibility for Chapter 7 cases. Here’s how it works:
- Compare your current monthly income to the state median income for your family’s size. The current income is twice your gross income over the six months before filing bankruptcy. You pass the means test if your income is less than the median. Otherwise, proceed to the next step.
- Determine your disposable income. This is calculated by subtracting allowed monthly expenses from your monthly income. If you have a high disposable income, likely, you won’t qualify for Chapter 7. You may be eligible for Chapter 13 instead.
For any questions regarding the means test, you can ask our experienced New Jersey bankruptcy lawyer.
Why Do I Need a Bankruptcy Means Test Attorney in New Jersey, NJ?
A bankruptcy means test is a complicated debt issue to understand. Such a situation is the case as this kind of bankruptcy is associated with multiple intricate concerns. Being eligible to file for Chapter 7 bankruptcy requires that debtors check their median income first and foremost. If the debtors’ median income for their families is higher than the allowable amount, then debtors need to pass the New Jersey means test. Passing this test makes debtors eligible to apply for Chapter 7 bankruptcy.
If the debtors’ families’ income is below the required amount for the New Jersey median for the corresponding household sizes, the debtors become exempt from the New Jersey means test. Hence, debtors can apply for Chapter 7 bankruptcy right away.
Call our Bankruptcy Means Test Attorney in New Jersey, NJ, Now!
Debtors need to ensure they take the bankruptcy means test in New Jersey to find out whether or not they’ve passed it. Debtors must get accurate information as to whether or not they are qualified for bankruptcy relief or not.
Our bankruptcy means test attorney in NJ, can work with debtors step by step to sort out their bankruptcy issues within the state. Karina Lucid Law also offers a credit repair services. Call us now to get our free, no-obligation, and stress-free consultation!