When considering the chapter of bankruptcy that will most effectively offer relief from your debts one of the deciding factors is the means test. This income-based test is calculated to determine if your income is above or below the average for your household size and it determines how to file bankruptcy properly.
The United States Census Bureau collects data regarding the amount of annual income each household earns based on size and area. If your income falls below this average, then a simpler means test document is required for your bankruptcy petition.
If your income is higher than this average, then your case will be considered above the median and will require a complex calculation of all income and expenses, which is a much lengthier process.
To determine if your income places your household in the above-median category, you will need to determine a few factors before the calculation begins. First, what is your household size? A family with a husband, wife, and 2 children makes for a household of 4. However, a household could also include extended family members, children of joint-custody, and domestic partnerships. Your bankruptcy attorney will be able to determine how the number of people in your household will affect your bankruptcy.
Next, gross income (before any deductions) from all sources will need to be calculated for the 6 months prior to the month of filing. This income will include all sources including wages, child support, self-employment, etc. There are few exceptions to this. Disclosing all sources of income will be extremely important for an accurate calculation of your means test.
If you’re trying to figure this out on your own, be cautious of online calculators. Their math may be correct but how the math is applied can make a big difference in a successful bankruptcy.
The best way to determine how to file bankruptcy in Springfield Missouri is to schedule a free consultation with one of our experienced bankruptcy attorneys.