Florida Means Test Calculator

Florida Means Test Calculator for Chapter 7 Bankruptcy

As bankruptcy lawyers in Tallahassee, we often find ourselves explaining what Florida means test calculator is and how you can use it to determine whether you qualify for a Chapter 7 bankruptcy. With recent changes in the law, it is even more important that our clients know about this test before deciding whether to file for Chapter 7 bankruptcy or not. It is also important that you consult with a Florida bankruptcy lawyer before anything else.

What Is Chapter 7 Bankruptcy?

A Chapter 7 bankruptcy case requires a trustee to collect, organize, and sell your nonexempt assets. These are generally things that you don’t use for living or working. According to the U.S. Bankruptcy Code, your creditors would be paid out of the proceeds. You are not responsible for their payment if they don’t pay in full or at all.

What Happens If I Passed the Means Test?

Even if you fail the test, it doesn’t mean you cannot afford to pay your bills. If our bankruptcy attorney in Tallahassee successfully argues to the court that Chapter 7 is the only way to get the relief you require, we can overcome this presumption. You can also file for Chapter 13 protection if that fails.

Chapter 13 bankruptcy is available to people with steady incomes. They can create a plan to pay off their debts completely or in part. These would be paid in monthly installments for three to five years. Your ability to file is not affected by your income. This will affect the amount of time it takes to pay off your debts. It will only be valid for three years if it is less than the median household income. If the court determines that a longer term is necessary, it will not. Your plan will last five years if it is more than that. Creditors can’t begin or continue collection efforts during these years.

What Is the Income Offset for Chapter 7?

The Chapter 7 income cut-off is the median income of a Florida family of the same size as yours. This formula is not perfect. There are many variables. You can still use Chapter 7 even if you make more.

How Is Chapter 7 Means Test Calculated?

The analysis consists of two parts. The second step is not necessary if you have a lower income. First, determine how your income compares with the median Florida income. The median income would be the one with the highest and lowest incomes in Florida. The “median” income is not the same as the “average”.

Your gross household income is calculated by comparing it to the median household income of a family of the same size within the state. This number is determined by the U.S. Census Bureau and is updated several times per year. This formula takes into account:

  • The pertinent time frame: Your income for six months prior to filing for bankruptcy. You may be able to file for bankruptcy earlier if you have more income during certain times of the year.
  • Your sources and income: This formula takes your gross wages (before taxes and deductions are taken out) and any other income sources. Which can include income from other sources, such as alimony, child care, income from a business, unemployment benefit, pension, or retirement payments. But, not Social Security retirement and disability benefits.

How Do You Pass Chapter 7 Means Tests?

The six months preceding the calculation determine your gross annual income.

  • On this Department of Justice webpage, go to the “Data Required to Completing the 122A Forms and the 122C Forms” section. From there, choose the time period that is most appropriate for you.
  • Next, you will see a page that offers the option of “Median Family Income Based on State/Territory and Family Size”. Click that link to open a chart showing Florida’s median family income, based on family size.

If your income falls below this figure, it’s lower than the median income.

Chapter 7 means testing

Your Income May Only Be a Part of the Story You Need to Tell

The next step in Chapter 7 means testing process is to determine if your expenses are too high to pay off your debts. The court will need to see your expenses. The IRS sets some amounts, but others reflect the actual amount you paid. If you cannot pay 25% of your non-priority unsecured debts in five years (debts with collateral that are not less important), the IRS can determine if Chapter 7 may be an option. Do not worry! Our Chapter 7 bankruptcy attorney in Florida is always here to help!

Contact Our Lawyers Today

No matter what the outcome of your Florida means test calculator is, Bruner Wright P.A. will help you navigate this process. Our bankruptcy lawyers in Tallahassee FL can request an exception from the court or file under Chapter 13 if the test results are not in your favor. Contact us today for a free consultation!

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