This is part one of a six part series on “How to Prepare a consumer Chapter 7 Bankruptcy without a Nebraska Bankruptcy Attorney”.
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Before beginning, I must state, and will continue to state throughout the series, that it is not advisable to prepare a consumer bankruptcy petition without the help and assistance of a qualified Nebraska bankruptcy attorney. It is a unique aspect of the law that most attorneys have no clue about.
Additionally, the information presented does not take into consideration if a debtor is a soldier, on social security assistance, has special circumstances, owns a business, is separated from a spouse, lives with others not related, or has dependents that do not reside with her.
Part I: The Bankruptcy Means Test
When beginning to prepare a Chapter 7 bankruptcy petition, I start with the Bankruptcy Means Test, because it is a test that determines whether a consumer debtor qualifies for Chapter 7 bankruptcy or not. This article covers the first half of the bankruptcy means test which determines qualification under 707(b)(7) of the bankruptcy code.
The Bankruptcy Means Test is part statistics test, part math problem, part standardized form, and part anything but standard form.
Before you start, you need to gather some documents, have internet access to the United States Trustees website, and grab a blank Form 22A from the Nebraska Bankruptcy Court.
You will need to gather all documents that indicate income received in the 6 month period prior to when you plan to file your chapter 7 bankruptcy petition. These items include paystubs, child support and alimony payment records, unemployment records, disability records, government assistance, social security or other benefits income, etc.
Part I of Form 22A deals with military personnel and “non-consumer” debts. This article doesn’t deal with these issues so it is advised that you hire a Nebraska Bankruptcy attorney to review your unique situation to determine qualification under those concepts.
In Part II of Form 22A deals with the calculation of monthly income. First, in Part II, section 2, the debtor needs to indicate marital status. Again, this article doesn’t focus on separated parties so hire a Nebraska bankruptcy attorney to help.
The remainder of Part II has you calculating monthly income from all sources using the documents you have already gathered. REMEMBER, this part of the bankruptcy means test is looking for gross income. This is the income before taxes and other deductions are taken out.
Part III of Form 22A has you determining whether you pass the bankruptcy means test under Sec. 707(b)(7) of the Bankruptcy Code. Enter your state or residence and your household size. (Household size is defined in different ways and you should consult a good Nebraska bankruptcy attorney if you have a different living arrangement than a single person or a married family). Now go to the U.S. Trustee’s means test website, find your state, then scroll over to the size of your household to find the applicable median family income.
Is your family income lower than the applicable median family income you just found from the bankruptcy trustee’s site? If so, you pass the bankruptcy means test and can file Chapter 7 bankruptcy.
Your family income is higher than the applicable median family income? Well, then you will need to continue on with the bankruptcy means test.
Check out the second half of completing the bankruptcy means test without a Nebraska Bankruptcy Attorney.
If you are having trouble wrapping your head around the Means Test, don’t worry about it. It is a difficult provision to make heads or tails of. Fortunately, I am a Nebraska Bankruptcy Attorney with a ton of experience with the Means Test. Contact me to schedule an appointment to review your unique situation.