What Expenses May You Include in Your Chapter 7 Bankruptcy Means Test?
Transcript:
(Editor's note: Brian is Clear Counsel's Communications Director. His prompts represent a conglomeration of inquiries submitted. If you have you have a question you would like answered in an upcoming video, email the inquiry to brian@clearcounsel.com)
Hi. Matt McArthur. Clear Counsel Law Group. I had a question come from a client the other day. What expenses are allowed to be included in a needs test analysis? Now, first off, we need to take a step back before I answer this question. The first part of this analysis is whether or not an individual filing for Chapter 7 bankruptcy is under-median or over-median. What I mean by that is you look at your household size and what state you live in. There is a median income figure for a houseful of that size in that state.
If your median income over the last 6 months is under that figure, then there's no need to go into the detailed analysis of what expenses are allowed to be used as deductions in a Chapter 7 needs test analysis. However, if you are over-median, there are a whole slew of different deductions that are available to an individual. Whether or not you are able to use those deductions is going to require some pretty specific detailed analysis for your particular case.
Some common deductions are income taxes that are withheld from an individual's pay stubs, out-of-pocket healthcare insurance premiums and the list goes on and on. If you are over-median and you're thinking about filing for Chapter 7 bankruptcy, please come see me. I will give you a customized, detailed, personal analysis for your particular situation. I'll let you know whether or not you qualify for Chapter 7 bankruptcy. Hope to see you soon.
