After all, the test is an unnecessarily complicated scheme that pushes some middle-income people who need to file under Chapter 7 into Chapter Nonetheless, there is one very good thing about the means test: most people do not have to take it. Who can avoid the means test?
Avoiding the Bankruptcy Means Test
If your income is below the state median, you need not take the means test. To determine if your earnings are below the threshold for taking the test, compare your average monthly gross income for the six months prior to filing for bankruptcy to the state median for your family size.
If your income is lower than the median, you can file under Chapter 7 without taking the bankruptcy means test. You can find the current Pennsylvania median income figures here.
Because the state median income takes into account family size, it is not uncommon for debtors with relatively high incomes to avoid the test. For a more details on the means test and how it works, click here.
If the majority of your debt is business, tax, or other non-consumer debt, you can avoid the means test. The means test applies solely to cases where the debts are primarily consumer debt.
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Other non-consumer debts may include personal injury and other tort claims and taxes. Therefore, understanding the basics of both types of bankruptcy filings can help you decide which type is right for your financial situation.
We help people file for bankruptcy relief under the Bankruptcy Code. Work may be performed by other attorneys. Fee includes court costs, attorney fees and case expenses for Chapter 7 bankruptcy.flexsign.net/includes/nukuqemuq/qyqaq-adobe-cs5.php
Do I Qualify for Chapter 7 Bankruptcy?
Chapter 7 Filing. A typical Chapter 7 filing can be closed within four to six months of opening the case. Once the case has concluded, the debtor emerges debt-free with the exception of certain nondischargeable debts, such as student loans, child support payments and recent taxes. You may also retain mortgage and auto loan payments under this type of filing. Identify your debts. Make sure your debts, or at least the bulk of them, are dischargeable before filing bankruptcy. Dischargeable debts include debts from medical bills, credit card bills, personal loans, business loans, and more.
Gather your paperwork. Bankruptcy requires you to disclose detailed information about your debts, assets, income, and other financial activity. You will need to present as many bank statements, pay stubs, tax returns, credit reports, and utility bills as possible, so before you file bankruptcy, get an early start on digging up those old financial records.
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Explore all your options. Before you commit to the Pennsylvania bankruptcy process, confirm that bankruptcy is truly the best way to manage your debt. Our bankruptcy alternatives lawyers can help you understand your full range of options, including mortgage modification and debt consolidation.
Answers from seasoned attorneys in Lancaster and Reading (Wyomissing)
Some of these decisions can be changed later, but making the appropriate choices at the beginning of the process will save you time and money. Do not try to hide assets. You may have felt tempted to transfer or sell some of your valuable assets prior to declaring bankruptcy.
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This is a major mistake you absolutely must avoid. Asset concealment is a form of bankruptcy fraud that can result in dismissal of your case — or even criminal prosecution. Work with an experienced bankruptcy attorney in Philadelphia.