If you have been feeling like you are stuck under an overwhelming amount
of debt for quite a while now, it is probably time you consider filing
for bankruptcy. When done correctly, bankruptcy can grant immediate relief
to those in debt by not only getting creditors off their backs but also
eliminating unsecured debts. Not just anyone can take advantage of this
solution, though. In order to file, you will first need to know how to
complete what is known as the Chapter 7 bankruptcy means test.
The purpose of the means test is to analyze your financial situation from
top to bottom and determine if you truly are in need of bankruptcy. The
conclusion will be based on the total wages of your household, sum of
all your debts, and necessary monthly expenses, among a few other categories.
If you pass the means test, you will be able to file for Chapter 7, which
liquefies all unsecured debt. If you do not pass, you might still be able
to find relief by using Chapter 13 to repay a portion of your debt over time.
Ultimately, it all comes down to the accuracy of your test. Be sure to
adhere to the following steps. If you still have questions,
contact a Springfield bankruptcy lawyer at Worsham Law Firm immediately.
Collect three forms: You are going to need a Form 22A-1, Form 22A-1 Supp., and a Form 22A-2.
They are used to determine your income, your exemptions, and your secured
debts to creditors, respectively. You can get official copies of these
forms from your local bankruptcy court, or with the help of a bankruptcy attorney.
Calculate monthly income: This is based largely on your marital or filing status – single,
married, legally separated, etc. – and all your sources of income
(excluding the Social Security Act) for the last six months before you
decided to file for bankruptcy. You are going to need to consider
anything and list it in a monthly amount. If you miss something important, it could
spell the denial of your bankruptcy claim. Items to consider include gross
wages, tips, bonuses, alimony payments, profits from personally-owned
businesses, royalties, compensation for unemployment, and pensions.
Compare your annual income: Take the amount you determined as your monthly income and multiply it by
12 to get your annual income. You may then access
https://www.justice.gov/ust/means-testing and compare it to the annual income of your state. If you are earning
less than the median, you have passed and require no more calculations.
If you are higher than the median, you are going to need to shift your
attention to Form 22A-2 and complete further calculations.
Get Help When You Need It
Finance law and bankruptcy litigation are not exactly conversations for
the watercooler. If you are not familiar with any or all of the bankruptcy
process, it is important that you seek some clarification and legal counsel
with a Springfield bankruptcy attorney from Worsham Law Firm at your earliest
convenience. Using their
20+ years of experience, they can navigate the system on your behalf and find a solution that
works for you without burying you under your debt. Request your own
free consultation today – there is no risk to you!