Posted On: April 19, 2010

Means Test Thresholds For All Cases Filed After April 1, 2010

A Sacramento bankruptcy attorney talks on Means Test Thresholds For All Cases Filed After April 1, 2010

Line 50, on Form 22A, commonly known as the Means Test, is your Disposable Monthly Income. This test determines whether you qualify for Chapter 7 or not. People not qualifying either do not file at all or file Chapter 13.

The first thing I determine is whether your debts are primarily consumer debts. So if more than ½ of your debts are related to your business (if you have one) then there’s no need to fill out Form B22A that is the means test.

Most people filing have debts that are primarily consumer debts which calls for your calculation of your gross income for the six months preceding and not counting the month you file. Those year to date figures listed on your pay statements are useful. If you’ve earned income from any other job or any other source for that matter then it’s income and has to be include. Talk to an attorney about any income derived from the Social Security Act.

After deriving your six month average income and then taking all the allowable deductions under Form 22A the monthly income for 5 years is less than $7025.00 or $117.08 per month Chapter 7 is not presumptively barred due to your income. If the monthly income based on the past 6 months of earnings before the month of filing is $11,725 or more (alternatively $195.42/month) then a Chapter 7 filing is income barred.

Disposable income more than $7025 and less than $11,725 (more than $117.08 and less than $195.42) is then compared to 25% of the total amount of your debts listed on Schedule F (where your credit cards, loan obligations, medical debt, and repo debt are listed). A disposable income that can pay 25% of your total Schedule F debt or more over 5 years will prevent a Chapter 7 filer from getting a discharge. If for example Line 50 comes out to $150.00 or $9000 over 5 years and all the debts on Schedule F total less than $36,000 then your Chapter 7 filing is presumptively income barred.

If you have questions regarding Bankruptcy in Sacramento please contact us at (916) 492-6020 in Sacramento or (916) 724-1690 in Roseville for a free consultation or visit www.bkanswers.com and we can connect you with one of our experienced Sacramento Bankruptcy Attorneys. After you have spoken with one of our Sacramento bankruptcy attorneys, we can schedule you for a free face to face appointment in an office location nearest you. Our team of Sacramento Bankruptcy Lawyers can assist you with all aspects of your bankruptcy or legal debt settlement case. If you have questions about filing a Chapter 7 bankruptcy, a Chapter 11 bankruptcy, a Chapter 13 bankruptcy, or would like to learn more about bankruptcy litigation, legal debt settlement, mortgage modification, lien stripping, cram down, stopping a foreclosure, wage garnishment, asset protection, discharging a debt, etc. we can help! We have bankruptcy attorneys located throughout California and Oregon who can assist you with all of your debt resolution questions. Please feel free to complete our free online bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy. We look forward to hearing from you, Sacramento and Roseville!

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