Creditors can argue that your case should be dismissed for abuse, a term not defined in the Bankruptcy Code;  It generally means that you’ve been a bad boy.  There’s a presumption of abuse when you flunk the Means Test and show that you have means to pay some of your debt.  Abuse might also exist [...]

Judge Feeney, Massachusetts Bankruptcy Judge, days ago issued an important decision on an issue of whether a Chapter 13 debtor would be allowed a means test deduction for a payment of a secured debt when the payment was not being paid due to lien avoidance. See In re Marshall, 2009 WL 1652471 (Bkrtcy.D.Mass. 2009). [...]

The U.S Court of Appeals, Fifth Circuit, recently ruled that on the means test’s Form B22A, a vehicle ownership expense is allowed even when the debtor has no car payment.  The court’s ruling in In re Tate, No. 08-60953 (5th Cir. June 10, 2009), agrees with the only other circuit court opinion on this issue, In re [...]

The means test is a key feature of the 2005 BAPCPA bankruptcy amendments. It incorporates state median income figures to determine who should pay back some of their debts in a Chapter 13 plan. Median income is on a sliding scale based on family size. Consequently, the more people one can claim as [...]

Much has been written on this blog about the two different types of budgets required in many bankruptcy filings.  If your average income - calculated by looking at your household earnings for the six months prior to the month of filing - is over the “median income” for a similarly sized family in your State, [...]

AARP’s magazine column The Short Answer echoed my view exactly:  stop fighting bankruptcy.  People often wait too long to make the bankruptcy decision, invading retirement and college savings to the detriment of their future.
The fear about “ruining credit” is misplaced:  most of those in deep enough to consider bankruptcy have lousy credit already says AARP.  [...]

Prospective Chapter 13 attorney fees are deductible from income for the Means Test.
You remember the Means Test, don’t you?  It’s that nasty form for Above Median Income Debtors to determine if they might be forced into a mandatory five year Chapter 13 case.
Line 44 of the Chapter 7 Form B22A, and Line 49 of the [...]

Bankruptcy filers must provide paycheck information (”pay advice”) to a trustee covering the 60 days before a filing, and also must provide their attorneys with income information for the six months before a filing (including gross pay and often detailed paycheck deductions) for means test calculations.  An uncooperative former employer makes this difficult.
Employment may have [...]

Consumer bankruptcy debtors must complete a series of calcuations based on their median income from the six months prior to bankruptcy– in order to complete one of two forms, either Form 22A for Chapter 7 debtors or Form 22C for Chapter 13 debtors, using standards supplied originally by the IRS/Census Bureau.   Those standards were recently updated by the [...]

You may not be eligible for chapter 7 if your income during the last 6 months was higher even though you have suffered a big decrease in pay.