If you have a huge backlog of debts that you have been unable to get rid of, Chapter 7 bankruptcy is ideal for you. However, Los Angeles based bankruptcy law firm https://www.recoverylawgroup.com/ says that to be able to get your debts discharged through Chapter 7 bankruptcy, you need to pass the Means test. Passing the Means test is an essential requirement for qualifying for Chapter 7 bankruptcy. Since Chapter 7 bankruptcy gets rid of the majority of the debts, prevention of its misuse by high-household income people is essential. Certain expenses are deducted from the income which might help you qualify the Means test. It is also used to calculate your disposable income in case of a Chapter 13 bankruptcy.
The expenses which are deducted from the household income are essential expenses like food, housing, utilities, and other monthly expenses. These expenses have a predetermined fixed amount as per IRS local and national standards. Apart from these, other expenses which are considered essential and deduction of which can allow you to pass Means test include:
- The mandatory court-ordered payments including alimony and child support.
- Childcare expenses such as day-care, babysitting, etc. can be used for deductions.
- Any expense incurred while taking care of an elderly, ill or incapacitated family member which may include nursing care, personal attendant, medicines, etc.
- Any monthly amount that you must pay for your term life insurance policy can also be deducted.
- You can also deduct the monthly mortgage and/or car loan payments you make. However, it is important to keep in mind that the amount allowed is the average of what is due over the next 60 months.
- If you are expected to pay for compulsory retirement contributions, union dues, etc. by your employer, you can claim that these amounts should be deducted from Means test as these are involuntary employment expenses.
- Any educational expenses incurred for a disabled child or that required for employment can also be deducted.
- If you have been regularly contributing for any charitable foundation, these contributions too can be deducted from Means test.
It is, however, mandatory for you to prove your long history of these expenses if you wish to have some rebate and qualify for Chapter 7 bankruptcy. though individually, the expenses might not be huge, cumulatively, they can add up to an amount which may help you pass the Means test if your income is just above the state median income. If you wish to get rid of your debts through Chapter 7 bankruptcy, experienced lawyers can help find out whether you can qualify for Means test or not. you can schedule an appointment with qualified bankruptcy attorneys by calling 888-297-6023.