Florida Bankruptcy Means Test: Eligibility and Requirements

If a client’s household income is over the “median income”, as of 2005, U.S. Bankruptcy Code requires attorneys to screen potential candidates for Chapter 7 bankruptcy through the “means test”. This is a way to determine if a client has the actual ability to repay some of their debt. If debt liquidation through Chapter 7 is not an option because of income, the client and attorney can then explore debt reorganization through Chapter 13 bankruptcy. SunCoast Law help clients just like you every day and administer the means test frequently. You will learn immediately which option to consider after meeting with one of our attorneys. We will carefully examine all of your finances to determine which debt relief solution to pursue.

Steps To Determine Eligibility for Bankruptcy

Step One: Your Income as Compared to the State Median A comparison is made between your household income and the median income of others (with the same size household) in your state. According to the U.S. Department of Justice figures, (2011), the median adjusted income figures for the state of Florida are as follows: $40,029 for a household of one person $50,130 for a household of two people $54,594 for a household of three people $65,135 for a household of four or more people If your adjusted income does not fall below the median figure for the size of your household, you may still be eligible for a Chapter 7 bankruptcy by passing the means test. Step Two: Expenses and Unsecured Debts Certain expenses may be deducted from your income that will lower your median household figure. This new amount will be compared to the unsecured debt you have including medical bills and credit cards. Step Three: Deductions from Gross Income The Internal Revenue Service allows for deductions to disposable income that could alter your means test, making you eligible for Chapter 7 bankruptcy. While the list of specific deductions is extensive, it may include:

• Some medical and dental costs
• Union dues
• Employment uniforms
• Auto loan payments
• Spousal support and alimony ordered by the courts

SunCoast Law will meet with you to discuss the means test and eligibility for bankruptcy. To schedule an appointment with one of our lawyers, call (844) 330-2727. We offer debt relief solutions in compliance with U.S Bankruptcy Code.