investment and bankruptcy lawyers serving tampaSix-Step Means Test – Income

Income is defined as any source of income without any regard to the source’s taxable nature. A bankruptcy attorney in Tampa will tell you that income includes all contributions to the household from any source that a debtor receives on a regular basis.

Completion of Bankruptcy Forms

The means test must be used in the bankruptcy schedules that debtors file at the commencement of their case. For debtors without primarily consumer debts, the means test form must be filed after the debtor checks that the debts are not primarily consumer debts. The schedules that use the means test include a box that states that a presumption of abuse does or does not exist. If the box indicates that it does, the court clerk sends notice to creditors after the filing of a petition that states that a presumption of abuse arises. If a presumption of abuse is presumed, the bankruptcy trustee files a statement with the clerk after meeting with the creditors. The trustee must bring a motion to dismiss or file a motion that states why such a motion is not being filed. Creditors can also file a motion to dismiss. However, if a debtor’s income is below the state median for Chapter 7 bankruptcy, the creditor does not have the proper standing to dismiss the case.

The Six-Step Means Test

The Six-Step Means Test consists of the following steps:

  • Determine the debtor’s currently monthly and annualized current monthly income.
  • Compare this figure with the median income schedule.
  • Use IRS standards to assess necessary expenses.
  • Determine additional expenses.
  • Determine debts that are secured and priority claims.
  • Determine the debtor’s net current monthly income.
  • Assess whether there is a presumption of abuse.

Legal Assistance from a Bankruptcy Attorney in Tampa

For questions on the means test, contact a bankruptcy attorney in Tampa from Savage Villoch Law, PLLC by calling (813) 251-4890.