Means Test and "less than 25%" of debt

[TeacherMomma]

In another thread a poster mentioned something along the lines of "My total unsecured is going to be $XXX, so that excess on the means test would be less than 25% of my debt over 5 years, so I think I will make it, but not sure". (not exact quote) This was in relation to having excess when the means test is calculated.

Can someone explain to me why this "less than 25%" is a factor in anything regarding passing the means test? In a case I was reviewing that has similar characteristics, the objection to discharge mentions the same thing - just wondering.

Thanks ;)

[justbroke]

Can someone explain to me why this "less than 25%" is a factor in anything regarding passing the means test? In a case I was reviewing that has similar characteristics, the objection to discharge mentions the same thing - just wondering.

There are two parts of the "Means Test". First is the under/over median test. If you're under the median, thejn you don't take the rest of the test.

If you're over the median, you take the rest of the test. If the amount shown for your "disposable income" is over $108/month, then you have a presumption of abuse. If that amount is under about $180/month, then you have to see if that amount times 60 is less than 25% of your unsecured debt. If it is over 25% of your unsecured debt... then you have the "means" to pay something to unsecured creditors. It also can't be more than about $10,800 (60 x $180).

Bottom line... if you're under median or your disposable income is less than $108. Don't worry about it.

If you're over the media and your disposable income is greater than $108 but less than $180, then you need to take the 25% test.

[biotechsolution]

In another thread a poster mentioned something along the lines of "My total unsecured is going to be $XXX, so that excess on the means test would be less than 25% of my debt over 5 years, so I think I will make it, but not sure". (not exact quote) This was in relation to having excess when the means test is calculated.

Can someone explain to me why this "less than 25%" is a factor in anything regarding passing the means test? In a case I was reviewing that has similar characteristics, the objection to discharge mentions the same thing - just wondering.

Thanks ;)

that 25% payback over 5 years isn't really something that is adheared to. That's how people can be in a 13 with 2-3% payback.