These are laws with several exceptions. Check if you can file for Florida bankruptcy Chapter 7. Maybe it will be challenging to determine your eligibility for Chapter 7 bankruptcy. But you don’t have to try it yourself. We can check your eligibility and offer alternatives if not.
Regardless of whether your income is high or low, anybody can file for bankruptcy. High-income earners are not exempt from filing for bankruptcy. There are two forms of bankruptcy that you can file for. Chapter 7 is only for low-income earners, while Chapter 13 lacks an income level. The Chapter 7 bankruptcy sometimes has a challenge in establishing its determination of whether you qualify. You must qualify under both the median income test and the means test.
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Sometimes, it is easy to decide if you qualify for the Florida bankruptcy chapter 7. You qualify if your family income is less than the median income for a family of your size in Florida. It is not simple to calculate your average household’s income. It is not simply glancing at your tax returns and plugging in the number. How to calculate your average household income? Calculate your six-month average monthly income. Multiply the monthly average by 12.
The Florida median family income as of April 2024.
- 1-person family: $62,973
- 2-person family: $77,639
- 3-person family: $89,908
- 4-person family: $104,069
- 5-person family: $113,969
- 6-person family: $123,869
- 7-person family: $133,769
- 8-person family: $143,669
- 9-person family: $153,569
Add $9,900 per additional person for families with nine or more persons. Compare your household income to the medians below. You’re likely eligible if you earn below the median. If you are above the median, the means test comes next.
Even if you don’t think you’re eligible, you might be. A bankruptcy attorney can help.
Understanding the Means Test: Can You Qualify for Chapter 7?
You can still be eligible for the Florida bankruptcy chapter 7 if the average household income is greater than the median. You can be eligible if your expenses are too great to pay back creditors, and you need to subtract your average monthly income from the expenses you have. National Standards can restrict how much you can subtract per expense. There are a variety of different expenses that can be subtracted from your income.
This is not an exhaustive list, but the following are some of the most common ones.
1. Secured Debt Payments
You can deduct an ongoing payment that you make on your house or vehicle (but only if you are not going to return the house or vehicle to the lender).
In a Hurry? Dial +18-503-850-342 Now!2. Unpaid Taxes
You can deduct unpaid taxes you owe if you have them. You can also deduct your ongoing tax liability (not the withholding amount, which has been deducted).
3. Deductions Required by Your Employer
You can deduct expenses if your employer requires you to contribute to a retirement plan or union dues, and uniforms.
4. Certain Insurance Premiums
You can deduct monthly health insurance, disability insurance, and term life insurance premiums.
5. Certain Education Expenses
You can deduct education expenses in two situations: If it is for a required job or for paying for a child with a physical or mental disability.
6. Childcare Expenses
You can deduct the cost of childcare, including babysitting.
7. Court-Ordered Payments
You can deduct court payments (e.g., child maintenance and alimony) from your means test.
8. Caregiver Expenses
It can be expensive to care for an elderly, a disabled, or a chronically ill person. You can deduct your caregiver expenses if you are a caregiver, even a part-time caregiver.
Rules for Means Testing Exceptions
The bankruptcy laws already are complicated. They become even more complicated by a series of exceptions to the rules of means-testing. Keep in mind that Florida has business debt exceptions to the means test. You are not required to pass a means test if the debt you are thinking of filing bankruptcy on is business debt.
There is another exception for disabled veterans. You do not have to qualify on the means test if you have a disability of 30% or more, and you had active duty debts or homeland defense-related debt. You need to file a form if you qualify for either of the exception grounds.
Bankruptcy Means Test Explained: How to Calculate Your Eligibility
The means test is a matter of taking your adjusted monthly income and multiplying it by 60. This is your total “disposable income” for 5 years. You pass if the number is less than $9,075. If the number is more than $15,150, you don’t pass but can seek an exemption. If the number that is given to you falls between $9.075 and $15,000, then what? You will have to perform extra calculations here to determine whether you can file Chapter 7 bankruptcy or not.
All this might seem confusing. Don’t worry, if you want to hire us, we will accompany you every step of the way.
Summing Up!
It is painful to have to decide to go through bankruptcy. It’s the start of a new financial life. Do not hesitate to contact us if you are thinking about going through bankruptcy or are getting ready to file. Keep in mind that the above-mentioned requirements are just general guidelines, and exceptions do apply.
If you are unsure if you are eligible for the Florida bankruptcy chapter 7, Bruner Wright PA can help you assess your finances and see if this is an option. We have extensive experience assisting individuals such as yourself in exiting what appears to be an overwhelming debt burden.
Call Bruner Wright today, and we can begin your path to living debt-free.
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