341 Meeting Of Creditors
What Is The Marital Deduction Adjustment For The Means Test?
If you are separated and you claim separate households, the income of your non-filing spouse isn’t included on the means test. But if you are sharing your household, your spouse’s income is included. So if your non-filing spouse has significant income, it could mean that you don’t qualify for chapter 7 bankruptcy. However, you may be able to counteract your spouse’s high income by using the marital adjustment deduction, and that’s basically taking into account that spouse’s own separate expenses.
As Of November 1st 2016 What Are The Income Requirements To Pass The Means Test?
For November 1st of 2016, the median income for a household size of one in Virginia is $55,753. The median income for a household size of two is $70,976, a household size of three is $81,369, a household size of four is $96,513, and a household size of five is $104,913. You would add $8,400 for each additional household member above that amount.
Are Family Support Obligations Accounted For In The Means Test?
Yes. If you pay family support, that’s a very beneficial deduction on the means test. This includes child support, spousal support and any court-ordered payments.
What Happens When Someone Passes The Means Test?
If you pass the means test, you qualify for chapter 7, which means that you are going to receive a discharge of all of your debt, and it’s unnecessary for you to enter into a payment plan. So your next step would be to hire an attorney, fill out the paperwork, provide documentation, and file for chapter 7 bankruptcy.
What If Someone Fails The Means Test?
You must then make some payment towards your creditors through a chapter 13 bankruptcy. However, there are debt limitations to chapter 13. If your unsecured debt is more than $394,725, that’s above the debt limitation for chapter 13. If your secured debt is more than $1,184,200, then that’s above the debt limitation for chapter 13, and you may have to look at a chapter 11 if you can’t pass the means test to file chapter 7.
For more information on Marital Deduction Adjustment, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (540) 788-2273 today.
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