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If you live in the Austin, Texas area and are looking for a way to handle your overwhelming debts, consulting an Austin bankruptcy attorney may be a good idea: he/she will review your particular situation and advise you on your options, including both personal bankruptcy and bankruptcy alternatives. The following article is provided by our Austin bankruptcy attorney. |
What is Austin bankruptcy means test?
A person can only file for Austin bankruptcy protection under Chapter 7 of the U.S. Bankruptcy Code if they have less than $100 of excess income, as defined by a “means test”. If they have greater excess income, they will be required to file a Wage Earner plan under Chapter 13 to repay a greater portion of their debts, over a longer period of time. The Census Bureau and the Internal Revenue Service (IRS) calculate the information required for the means test. They have computed average family incomes in each State, including Texas, and have created a chart to determine the median income for residents of these states.
For example, a single wage earner in Austin, Texas who filed for Austin bankruptcy in 2005 with earnings of more than the median earnings for the state of Texas of $33,280 may be required to file a Chapter 13 Wage Earner plan, instead of filing straight bankruptcy under Chapter 7. The median income in each state is recalculated each year. Your Austin bankruptcy attorney can give you the updated numbers based on the size of your family, and other factors.
Most individuals must complete Bankruptcy Forms B22A and B22C (Statement of Current Monthly Income and calculations).
Bankruptcy Form B22A is the form most Chapter 7 debtors will complete for “means testing” purposes. Bankruptcy Form B22C is the form most Chapter 13 debtors will complete. A debtor must enter income and expense information on to the appropriate form and then make calculations using the entered information. Failure to complete these forms correctly may mean you cannot file for Austin bankruptcy protection.
Some of the information needed to complete the forms comes from the Census Bureau and the Internal Revenue Service (IRS). Click here to find Bankruptcy Form B22A details for your State.
As you can see, completing these forms is very complicated, and it is essential you understand exactly how the means test works in your situation, so we strongly recommend that you consult an Austin bankruptcy attorney for further advice.
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