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Posted On: April 15, 2010 by Scott Sagaria

Projected Disposable Income Test for a Chapter 13 Bakruptcy

A Sacramento bankrutptcy attorney explains the projected disposable income test for chapter 13 bankruptcy...

The projected disposable income for someone filing Chapter 13 bankruptcy is measured by a standardized test that determines your means to repay the creditors over 5 years. If the gross income earned over the 6 months (annualized) before you file is greater than the median income in the state you are filing in then the means test is required.

The reason for the Disposable Income Test is to reduce the amount of discretion that courts have in determining a filer’s disposable income and press the filer into making a greater effort (or sacrifice) to repay a portion or all of his/her debts over 5 years. Some filers have a negative disposable income and others show some ability to repay debts over 5 years.

If the result of the means test is a positive figure then you would have to pay that amount for 60 months. A lesser amount can be proposed but if the trustee or a credit card creditor points out that less than the projected disposable income is being paid then the law forbids the court from approving the Chapter 13 Plan.

Where a Chapter 13 filer shows the means to repay the means test can be a really mean test.

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!

Posted by Scott Sagaria | | Email This Post | Comments (0)

Posted In: Chapter 13 Bankruptcy , Consumers in Debt

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