Search for: "bankruptcy "means test""
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12 Jan 2007
Chattanooga bankruptcy attorney Tom Ray filed a lawsuit today on behalf of Bernard Francis Schultz and Elizabeth Mary Sabatine naming U.S. Attorney General Roberto Gonzales and U.S Trustee Richard Clippard as defendants. Tom Ray said this lawsuit challenges the constitutionality of the reformed U.S. bankruptcy law that went into effect October 2005. Ray contends the "means test" is discriminatory since it is calculated based on median income levels which vary between the states. [read post]
22 Oct 2006
A good article explaining the means test can be found here - The New bankruptcy "means test" Explained In Plain English... [read post]
8 Dec 2007
What happens if your bankruptcy "means test" results in your lawyer telling you that you cannot file a chapter 7? Â Or that your chapter 13 monthly payment must be an amount that is too much for you to pay? Â You need to start understanding the means test, contained in Form B22, if you plan on [...] [read post]
23 Feb 2008
One of the changes which became effective January 1, 2008, Â for the bankruptcy "means test" concerns expenses for health care. Â Lines 19B and 31 of Form B22 (chapter 7), and lines 24B and 36 of Form B22C (chapter 13), now constitute a two-part listing for health care expenses, including a minimum allowance you are entitled to [...] [read post]
6 Jan 2008
Update: January 8, 2008 Woo hoo! The problem with the means test forms has been fixed! But if you were unfortunate enough to have downloaded an early version of this form (before January 8th, around 3pm EST) you were probably driven crazy by the the bug described in the original post below. Relax. You're not crazy. Download the new means test forms. They work. It's all good. Original Post: Imagine my surprise yesterday afternoon, while checking out the new official bankruptcy means test forms for ... [read post]
25 Jun 2008
By: Scott B. Riddle, Esq. In Schultz v. United States, 2008 WL 2229495 (6th Cir. June 12, 2008) (pdf opinion here), the debtor argued that the Means Test violates the United States Constitution because the test is reliant on state and local income standards and deductions. Because of these deductions, eligibility under the new regime is calculated at least in part based on the state and county where the debtor resides. The housing expense deduction, for example, is governed by the county where the ... [read post]
8 Jan 2008
Update: January 15th, 2008 Be aware that many local courts are still offering the defective "original version" of the fillable .pdf means test forms, rather than the fixed "v2″ versions (see below). It does not appear that the U.S. Court System has informed the lower courts that the new forms need to be posted. I feel sorry for anyone who is trying to use them. Original Post: The defective means test forms that were discovered on the U.S. Courts website this weekend and mentioned in this blog two days ... [read post]
7 Dec 2009
This week I read a decision from a south Florida bankruptcy court which dealt with a few issues I frequently see in my own bankruptcy practice. Many of my clients have borrowed money from their 401k to help pay their bills before bankruptcy.. The tell me they have to make a minimum amount of loan repayments each month to avoid having to declare the loan balance as a withdrawal subject to income tax. The clients state that their loan repayments are "required" and ask is the minimum monthly loan repayment ... [read post]
25 Oct 2006
Credit to the Georgia Bankruptcy Blog for spotting this terrific article which explains the "means test," a troublesome and controversial feature of the BAPCPA amendments which now determines who gets to file Chapter 7 ("straight" or liquidation bankruptcy) and who will be steered (notwithstanding their preferences or what's actually best for the particular debtor) into Chapter 13's payment plan provisions. Why is the means test so important for debtors to understand in evaluating whether bankruptcy is ... [read post]
8 Sep 2007
Nope, a "means test" is not a test of how mean can you be anyway. Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 in October 2005 and mandated that a "means test" be used to determine whether or not a debtor is entitled to a Chapter 7 discharge or whether the [...] [read post]
19 Dec 2008
One of the more divisive post-BAPCPA consumer issues has been whether a debtor who has no monthly vehicle loan or lease expense can claim a vehicle ownership deduction when applying the means test. Until Wednesday, no circuit court of appeals had considered the issue. The four bankruptcy appellate panels that had rendered opinions were evenly split, as were the bankruptcy courts. Now the Seventh Circuit Court of Appeals has weighed in on the issue in In Ross-Tousey v. Neary, 2008 WL 5234070 (7th Cir. ... [read post]
5 Oct 2007
A bankruptcy judge can find that "special circumstances" exist to avoid the harsh impact of the Means Test now used in all above-median income cases. Two days ago, I provided a very brief overview of the Means Test. I briefly summarized its three parts as: (1) Each debtor's income for the [...] [read post]
21 Dec 2007
If you're a high-income individual living alone and thinking about bankruptcy, you may want to think faster. You may be affected by changes in the means test that take effect in 2008. Significant Changes in Expense Deductions & Forms Beginning January 1, 2008 Under the new "Expense Allowance" standards used by the bankruptcy courts to determine eligibility, individual filers with above-state-median incomes (say $6,000 per month) will see their monthly means test expense deductions fall by more than ... [read post]
12 May 2007
"CMI" is also known as "MEANS TEST INCOME". "CMI" stands for current monthly income, even though it is based upon past figures, and therefore is not current, may not be monthly or even what we think of as income. CMI is calculated from "income", as defined by the new bankruptcy laws, that a bankruptcy debtor has received [...] [read post]
13 Aug 2007
If you "fail" the means test but you file a Chapter 7 bankruptcy anyway, the United States Trustee will file a motion to dismiss your case or allow you to convert your case to a Chapter 13 bankruptcy. A bankruptcy judge may allow you to stay in a Chapter 7 bankruptcy if you have extenuating circumstances [...] [read post]
16 Nov 2007
If your bankruptcy lawyer has told you about the "means test" contained in the new bankruptcy law, hopefully she has also told you that you have "passed" this test. But what if your lawyer has told that you are "flunking" the means test? You need to understand why she would come to this [...] [read post]
21 Nov 2007
If you are considering filing bankruptcy, you should know that the "means test" created by the 2005 Bankruptcy Reform Act can actually be understood by both your lawyer and you -and understanding the means test is the first step toward "passing" it. In Part 1 of this series, we looked at how the means test uses [...] [read post]
8 Apr 2008
I keep encountering posts on internet bankruptcy boards from individuals who have "filled out the means test" and then proceed to announce their conclusions. Â Given the uncertainties in the legal community about how to apply the means best and the think and re-think I engage in preparing Form 22, I can't imagine a non lawyer learning anything reliable from trying to do this themselves. The tricky issues include how to deal with income from non filing spouses; from roommates or extended family member; ... [read post]
26 Jan 2008
The figures used for your state's median family income on the bankruptcy means test will change again for cases filed on or after February 1, 2008. A chart by state and family size is available on the U.S. Trustee website. The numbers come from the U.S. Census Bureau and have been adjusted six times since [...] [read post]
11 Apr 2008
An above-median income Chapter 7 debtor must pass the Means Test to avoid a mandatory five year Chapter 13 case. The Means Test takes the debtor's income, subtracts IRS-allowed expenses and secured debt payments, and forces a Chapter 13 filing if the difference can pay a sufficient amount of debt. Here's a short [...] [read post]
