Millions of individuals in the United States experience significant financial stress caused by so much unpaid debt. This may be due to unforeseen events in your life like serious illness, loss of income, and bad choices. In order to keep their heads above water, several people try to do whatever it takes to stay afloat and one thing often considered is filing for Bankruptcy. But before the petition can be approved, they must first pass the Ohio Bankruptcy Means Test.
Bankruptcy filing is one way you can legally get out of your money troubles and achieve debt relief. Still, it’s crucial that you understand that filing for Bankruptcy is not for everyone. Certain guidelines have been set for each Bankruptcy chapter that can be filed that put restrictions on who can qualify based on the amount of assets, income, and debt you have in all. The Ohio Bankruptcy Means Test will determine if an individual would need to file for Bankruptcy in order to pay back what they owe. Specifically, passing the Bankruptcy Means Test Columbus OH for Chapter 7 Bankruptcy will make you eligible for Bankruptcy filing in Ohio under that chapter.
If you are wondering how the Ohio Bankruptcy Means Test factors into whether you are eligible to file for Bankruptcy or not, receive a free initial consultation from one of our reliable Columbus Bankruptcy law attorneys at Sheppard Law Offices.
Why Do I Need a Bankruptcy Attorney in Columbus, OH?
The Bankruptcy process has helped in successfully preventing people from becoming homeless and kept families intact in the United States. But like most people, you might be one of those who are afraid of Bankruptcy filing. It’s why you should first get an idea how filing for Bankruptcy works and how passing the Ohio Bankruptcy Means Test can help your Bankruptcy case before making any decision.
With this, you need a skilled Bankruptcy attorney who will do the following for you:
- Let you know exactly what your rights are and do everything possible by the law to protect it.
- Teach you how to make smarter financial decisions in the future to help you remain debt free for a long time.
- Gives you a clear understanding of the viable options based on your present situation.
- Thoroughly assess your circumstances and determine the next steps you can take.
To find out how you can pass the Ohio Bankruptcy Means Test and see if filing for Bankruptcy can help improve your current situation, reach out to the law office of Sheppard Law today to schedule an appointment.
What is a Bankruptcy Means Test?
Taking the Ohio Bankruptcy Means Test is a way to check if you are qualified for Chapter 7 Bankruptcy filing. During this process, the Bankruptcy Means Test Columbus OH calculator will determine if you have an income that’s less than the state’s median income to make you eligible to petition for Chapter 7 Bankruptcy.
Filing for Chapter 7 Bankruptcy, however, is not meant exclusively for low earners. You can still qualify to file for Chapter 7 Bankruptcy even if your monthly income is high if the totality of the circumstances were carefully evaluated (e.g. you also have significant expenses such as taxes, loan payments, or if you’re the breadwinner of a huge family).
The Ohio Bankruptcy Means Test measures how much disposable income you have by removing certain monthly expenses like lease payments, car loan payments, and other dues from the equation. Doing this should determine your average monthly income within the 6 months before you file for Chapter 7 Bankruptcy. You won’t be able to qualify for Chapter 7 Bankruptcy filing if you hit a specific disposable income threshold. Basically, it means the bigger your disposable income, the less likely you will qualify.
How Do I Pass the Ohio Bankruptcy Means Test?
For you to pass the Bankruptcy Means Test, your current monthly income (your gross income earned over the last 6 calendar months prior to Bankruptcy filing multiplied by two) must be found to be less than the state median income.
Additionally, you also need to accomplish the Ohio Bankruptcy Means Test forms for Chapter 7 Bankruptcy in order to better determine your eligibility. You won’t qualify to file for Chapter 7 Bankruptcy if your documents show your disposable income is enough to pay off most or all of your debt. Note that this test only applies to consumer debts.
To learn what other forms you need to fill up and what documents you need to provide, get in touch with the Sheppard Law Offices right away!
Can I be Exempted from Taking the Bankruptcy Means Test?
According to the Bankruptcy code, passing the Ohio Bankruptcy Means Test is not necessary when filing for Chapter 7 Bankruptcy. This is often the case if you:
- Have no consumer-related (no medical debts or credit card debts)
- Are a disabled veteran
- Have debts incurred during active military duty
To see if your current situation allows you to be exempted from taking the Ohio Bankruptcy Means test, speak to a trusted Columbus Bankruptcy attorney immediately!
What Happens if I Fail the Bankruptcy Means Test?
If you failed the “means test” for personal bankruptcy because your monthly income is too high, you may still be able to get bankruptcy relief in other ways. For example, you may evaluate your CMI as well as expenses to determine if anything is likely to change in the next months before filing for Chapter 7 Bankruptcy. The Chapter 7 means test only takes into account your finances for the previous six months. If your earnings or expenses fluctuate seasonally, your financial picture could be drastically different 6 months from now. If this is the case, it may be worthwhile to wait and try again later.
If you have too much disposable income, you won’t be able to use Chapter 7 Bankruptcy because you’ll be required to pay back your creditors with that money. However, by filing under Chapter 13, you might still be able to get some bankruptcy relief.
Does the Bankruptcy Means Test Also Apply to Chapter 13 Filing?
If you failed the Ohio Bankruptcy Means Test for Chapter 7, the next step would be to determine if your disposable income allows you to benefit from filing for Chapter 13 Bankruptcy.
Though your disposable income may be too big to qualify for Chapter 7 Bankruptcy, it might be enough to pay your creditors monthly through a Chapter 13 Bankruptcy repayment plan. The Chapter 13 process lasts for 3 or 5 years (depending on what payment plan the court approved) which should give you enough time to settle everything barring any sudden changes in your financial situation.
Contact your Ohio Bankruptcy attorney to find out what forms you need to accomplish when filing for Chapter 13 Bankruptcy and to get an accurate computation of your monthly disposable income.
Call our Columbus Bankruptcy Attorney Now!
When you realize that you’re in so much debt and you don’t know what to do, it may feel like you’re stuck in a hopeless situation. Checking if you pass the Chapter 7 Means Test before filing for Bankruptcy is the best way to get a fresh start and regain control over your finances.
If you’re in need of an experienced Columbus attorney to help you build a strong Bankruptcy case and give great legal advice on estate planning and taxes, Sheppard Law Offices is your best bet! Avail of a free consultation today to learn if your circumstances will allow you to pass the Ohio Bankruptcy Means Test. We have offices located in Columbus, Newark, and Mt. Vernon.