Chapter 7 bankruptcy is a legal process designed to help individuals who are struggling with overwhelming debt. Filing for Chapter 7 bankruptcy in Florida can be a daunting task, especially when it comes to understanding the income limits and the second portion of the means test. In this article, we will discuss Chapter 7 bankruptcy Florida income limits, as well as the second portion of the means test that uses IRS charts to determine if a person ultimately qualifies for a Chapter 7 bankruptcy.
Chapter 7 Bankruptcy Florida Income Limits:
Before you can file for Chapter 7 bankruptcy in Florida, you must first pass the income limits test. The income limits test is a means test that compares your income to the median income for households in Florida of the same size. If your income is below the median income, you automatically qualify for Chapter 7 bankruptcy. However, if your income is above the median income, you may still be eligible to file for Chapter 7 bankruptcy, but you must complete the second portion of the means test to determine if you qualify.
Second Portion of the Means Test:
The second portion of the means test is used to determine if you have enough disposable income to pay off your debts. This portion of the test uses IRS charts to determine reasonable expenses and then subtracts those expenses from your average gross income. These charts are based on your household size and geographic location. The charts include expenses such as housing, utilities, transportation, food, and other necessary expenses.
To complete the second portion of the means test, you will need to gather all of your financial documents, including pay stubs, tax returns, and bank statements. Your bankruptcy attorney will use these documents to determine your monthly income and expenses.
If the second portion of the means test shows that you have enough disposable income to pay off your debts, you may not qualify for Chapter 7 bankruptcy. Instead, you may need to file for Chapter 13 bankruptcy, which involves a repayment plan that allows you to pay off your debts over a period of three to five years.
Conclusion:
Filing for Chapter 7 bankruptcy in Florida can be a complex and confusing process, especially when it comes to understanding the income limits and the second portion of the means test. It is important to work with an experienced bankruptcy attorney who can help guide you through the process and ensure that you make the best decisions for your financial situation. By understanding the Chapter 7 bankruptcy Florida income limits and the second portion of the means test, you can take the first step towards getting your finances back on track.
Please feel free to reach out for a free consultation by emailing info@tejeslaw.com, calling (407) 734-5166 or using this link to schedule an appointment yourself.
Sources:
- United States Bankruptcy Court for the Southern District of Florida. (n.d.). Means Testing Information. Retrieved from https://www.flsb.uscourts.gov/faq/means-testing-what-it-where-can-i-find-information-it
- United States Department of Justice Means Testing Information. Retrieved from https://www.justice.gov/ust/means-testing
- Chapter 7 Means Testing Calculator. Retrieved from https://tryascend.com/bankruptcy/calculator
