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The Importance of the Means Test in Bankruptcy Filing

The Importance of the Means Test in Bankruptcy Filing
"""When filing for bankruptcy, you must first determine the form of bankruptcy you will file. And in order to file under the most advantageous terms, you must first determine which varieties of bankruptcy filings you qualify for.

Since the enactment of the new bankruptcy law five years ago, this has become somewhat complicated. Consequently, the process of determining whether you are eligible to register under the most advantageous plan typically involves determining whether you pass the state's means test. If you fail this examination, you will be required to file for bankruptcy under one of the more restrictive plans. However, if you pass the examination, you will be permitted to file under the more advantageous bankruptcy plan.

But, there are two issues with this evaluation. Each jurisdiction has its own regulations. Therefore, it is impossible to calculate your current net income and determine if you meet the requirements test using a simple formula. Because it will vary from state to state. In certain jurisdictions, it is a simple number. In other cases, additional income variables must be considered. Additionally, the measure is calculated using a six-month moving average. Therefore, if your employment is seasonal and you have just completed a period in which you earned more money than at other times of the year, you may fail the means test. In contrast, if you waited another six months, you would likely pass the means test.

The second factor that effects your ability to pass the means test is the allowable expenses. These vary among the jurisdictions as well. In some states, certain business expenses may be deducted from your income, whereas in others, these deductions will not be permitted.

The aim of the majority of individuals is to pass the means test and qualify for Chapter 7 bankruptcy, which is generally regarded as the most favorable for consumers.

To determine if you pass the means test for your state, it is best to consult with a local bankruptcy attorney. Nonetheless, if you cannot afford an attorney, some websites can calculate the means test for all states. Notably, however, not all of the results from the numerous calculators will be identical. Therefore, bankruptcy attorneys continue to be the most reliable source of information.""

" - https://www.affordablecebu.com/

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"The Importance of the Means Test in Bankruptcy Filing" was written by Mary under the Finance / Wealth category. It has been read 96 times and generated 0 comments. The article was created on and updated on 01 June 2023.
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