How Do I Pass The Means Test?...

[ejny65]

.... If for the past 6 months(and past year) my income was higher but now I have lost huge amount of business and there is no way my business gets to where it was for years? Does it mean I have to wait for months to prove it???

[Granny]

Short answer....yep, you need 6 months of reduced income.

[lrprn]

Short answer....yep, you need 6 months of reduced income.

Depending on how much you've been making the last few months, another option is to keep re-calculating your last six full calendar months of income at the beginning of every month to see when you fall below the median income for your state and familiy size. Once that happens, you have a good chance of qualifying for Ch 7.

Discuss this with 3-4 experience bankruptcy lawyers in your area. Most give free or low-cost initial consultations. You'll learn a great deal about what will be possible, including how long you may have to wait for your income to fall to qualify you for Ch 7.

[kiddles]

To determine if you are over the median income for your state, you use the last 6-months income. But that's only part of it - you still need to complete schedules I and J - - - Income versus Expenses. The Income for this part of the means test is a right now income - may or may not be the same as the last six months. For us, it wasn't.

We're about 30% over the median income, but passed the means test easily because of the I versus J schedules.

[BKcrazy]

I'm an independent contractor, so it's like having my own business. I have to keep ledgers. The last two months that the court got, were super low. But of the other 4 months one was even lower than what the court got, three were higher. I went back and looked at my petition and the expenses. So, for each month, I started with what I made, and subtracted. I'm still negative. My finances fell down like a domino design. Even if I doubled my 6 months, I'm still far below the median for my state. But, when my income really dropped, it was right after I lost shifts at one place I was working at. So, I was lucky, but how long has it been since your business dropped off?

[jp2861]

ejny: If you have time to mess with this, download the forms for the means test, and start filling them out as if you're filing pro se. This will educate you on the means test and give you an idea of where you stand. If you're over the median you need to figure in your exemptions as well as just looking at your last 6 months.