One of the most common questions many bankruptcy filers ask is, “Do I earn too much money to qualify for bankruptcy?” The truth is how much money you make is not as relevant to the issue as you may think. The basic way to determine if you qualify for bankruptcy is by a means test. A qualified Morris County bankruptcy attorney can assist you in determining how much your earnings will affect your means test.
Basic Truths About Income and Bankruptcy
Many people feel that they earn too much money to qualify for Chapter 7. Since the new law has toughened the qualifying rules for Chapter 7, individuals are now required to pass a means test. A knowledgeable Morris County bankruptcy lawyer can explain the new law in more detail.
Qualifying for bankruptcy really has to do with other things besides income. One of the ways to determine if you qualify to file for Chapter 7 is to determine what kinds of debts you have. Another way of determining debt is to look at how you are spending your money. A Morris County bankruptcy attorney can also help you determine if you qualify for Chapter 7.
The Four Sections of the Means Test
To qualify for Chapter 7, all bankruptcy filers must take and pass a means test. This test is consists of a series of questions that determines if an individual or family can qualify for Chapter 7 bankruptcy. There are four sections to the means test. It is helpful to contact a Morris County bankruptcy lawyer to inquire more about the means test. The four sections of the means test are:
- Monthly Income from 6 Months Prior to Filing
- The Calculation of Living Expenses
- The Amount of Money Needed to Pay Off Secured Debts
- The Total of Disposable Income
Determining if your income is too much is a question of whether you can pass the means test. However, it is important to consult with a knowledgeable Morris County bankruptcy attorney who can assist you in making the right determination.
By understanding how the means test is designed to see if there are other alternatives to bankruptcy, you can feel confident in making the decision to file for bankruptcy. A Morris County bankruptcy lawyer can walk you step-by-step through the process of keeping your car during bankruptcy.