Means test

[sdalonzo]

We need to file soon, but I'm concerned about failing the means test. My gross salary is under $50K (it's just my husband and me) and my husband has been unemployed for almost a year, no unemployment earnings either. Problem is--I work a lot of overtime to try to make ends meet, so my income for the last 6 months is almost $28,000. That puts us over the $50K limit. Is there any deduction for taxes? Or would we have to submit our living expenses? I'm afraid we'll have to wait 6 more months without me working any overtime, and then I don't see how we could make it.

Thanks anyone.

[lrprn]

We need to file soon, but I'm concerned about failing the means test. My gross salary is under $50K (it's just my husband and me) and my husband has been unemployed for almost a year, no unemployment earnings either.

It would help us help you better if you tell us which state you are planning to file in. Also are there any other sources of income that have come in during the last six months for either of you? Child support, accident claims, etc.

Problem is--I work a lot of overtime to try to make ends meet, so my income for the last 6 months is almost $28,000. That puts us over the $50K limit.

Have you stopped paying your non-secured credit cards and payments for any secured assets (house, car) that you don't want to keep? If you've done that and you are still having trouble making ends meet, then filing bankruptcy isn't going to help you that much

Is there any deduction for taxes? Or would we have to submit our living expenses?

Both are included on the Ch 7 bankruptcy forms you would file. Some figures are set by required IRS and census guidelines, others are your true living expenses.

Although being below the median income for your state is a good indicator you can file Ch 7, it's possible to be above the median and still be able to file Ch 7. You need to meet with 3-4 experienced bk lawyers in your area (most have free or low-cost initial consultations) - you may be worried for nothing.

I'm afraid we'll have to wait 6 more months without me working any overtime, and then I don't see how we could make it.

Since you are close to the median, to get under it may not take waiting six months.

My biggest worry for you is (as I said earlier) if you've stopped paying all non-secured bills and you two are still struggling to make ends meet, then you need to find a way to reduce your expenses, bring in more income, or surrender one or more secured assets when you file to stop the payments. There's really no other way.