August 3, 2020
When you're filing for bankruptcy, one of the first decisions you will make with your bankruptcy lawyer is whether to file for Chapter 7 or Chapter 13. Filing Chapter 7 bankruptcy is often preferable, because it will more completely wipe out your debts. However, there is concern over higher-income individuals, who have the ability to repay some of their debts, filing for Chapter 7 simply to avoid paying. The “means test” was developed as a way to determine which individuals have income and assets low enough to justify granting them a Chapter 7 bankruptcy.
It's best not to automatically assume you can't file for Chapter 7 just because you have a regular monthly income. You don't actually have to be destitute in order to be granted a Chapter 7 bankruptcy, and the formula takes into account certain monthly expenses. Having said that, there are procedures everyone must follow in order to determine their eligibility to file for this type of bankruptcy.
Aside from your state's median income, other factors may play into your means test calculations. Different counties and metropolitan areas often allow different amounts for expenses like housing, transportation, and basic necessities. For example, those who live in an area with a high cost of living may be able to deduct a higher amount for rent.
The means test can be complex, so if you don't automatically qualify for Chapter 7 bankruptcy on the basis of your income, it's best to consult a bankruptcy lawyer. He or she will already be familiar with the individual allowances of your area, and can help you deduct all of the expenses to which you are entitled. If you aren't sure that you will qualify for Chapter 7 bankruptcy, it pays to have this consultation, since in the long run Chapter 7 is usually a much better financial arrangement for you.
March 28, 2024
Protect Your Assets: Why and How to Update Insurance for Trusts and LLCsDiscover the crucial steps for updating your insurance coverage after transferring real property into a trust or LLC.
January 30, 2024
2024 New Employment and Business Laws in CaliforniaStay ahead in 2024 with Tyler Law, LLP's comprehensive guide on California's latest employment laws. Learn about enhanced paid sick leave, reproductive loss leave, noncompetition agreements, cannabis use protections, wage theft prevention, workplace violence prevention, anti-retaliation protections, and arbitration enforcement changes.
November 29, 2023
Proactive Prevention: Sexual Harassment Mitigation for EmployersDelve into effective sexual harassment prevention strategies for employers. Understand the types of harassment, the role of employer liability, and the essential steps for establishing a safe, respectful, and legally compliant workplace.