{"id":1372,"date":"2023-05-25T16:25:59","date_gmt":"2023-05-25T16:25:59","guid":{"rendered":"https:\/\/scottharrislaw.com\/?p=1372"},"modified":"2023-06-20T16:27:34","modified_gmt":"2023-06-20T16:27:34","slug":"common-mistakes-made-on-the-bankruptcy-means-test","status":"publish","type":"post","link":"https:\/\/scottharrislaw.com\/common-mistakes-made-on-the-bankruptcy-means-test\/","title":{"rendered":"Common Mistakes Made on the Bankruptcy Means Test"},"content":{"rendered":"

Steer Clear of Pitfalls: Know the Common Mistakes Made on the Bankruptcy Means Test<\/span><\/h2>\n

Bankruptcy is a complex legal process, and it’s no surprise that many individuals stumble when it comes to the details of the bankruptcy means test. One of the most critical stages of filing for bankruptcy, this test often trips up applicants due to the common mistakes made. These common mistakes made on the bankruptcy means test can drastically impact the outcome of your application, potentially steering your financial future off course.<\/span><\/p>\n

At Scott Harris Law, PLLC, we understand the nuances of these processes, and we’re here to guide you through each step. With years of experience in bankruptcy law, our law firm in Oklahoma City has honed a comprehensive understanding of the pitfalls many individuals encounter on the Bankruptcy Means Test. Our law firm’s attorney, Scott Harris, has handled hundreds of bankruptcy cases, using his deep knowledge and keen legal acumen to help clients successfully navigate the financial maze of bankruptcy.<\/span><\/p>\n

Missteps in the Bankruptcy Means Test can be costly, but they’re not inevitable. Understanding these mistakes is the first step to avoiding them. Whether you’re contemplating <\/span>filing for bankruptcy in Oklahoma<\/span><\/a>, or you’ve already started the process and encountered difficulties, getting informed is crucial. Let us help you get on the right track. Contact Scott Harris Law, PLLC today and secure our legal guidance to avoid these common errors and confidently navigate your bankruptcy process.\u00a0<\/span><\/p>\n


\nWhat is a Bankruptcy Means Test?<\/span><\/h2>\n

The Bankruptcy Means Test is a formal assessment used to determine if a debtor is <\/span>eligible to file for Chapter 7 bankruptcy<\/span><\/a>, also known as <\/span>liquidation bankruptcy<\/b>. Established as part of the <\/span>Bankruptcy Abuse Prevention and Consumer Protection Act of 2005<\/span><\/a>, this process plays a significant role in bankruptcy cases across the United States, including those in Oklahoma City, Oklahoma.<\/span><\/p>\n

The Bankruptcy Means Test examines the debtor’s income, expenses, and family size to ascertain if they possess enough disposable income to repay their debts. For residents in Oklahoma City, the means test compares their monthly income to the median income of a similar Oklahoma household.<\/span><\/p>\n

If the debtor’s income is below the state’s median, they automatically qualify to file for Chapter 7 bankruptcy. But if their income is above Oklahoma’s median, the test gets more complex. Detailed information about allowed expenses\u2014which can include housing, utilities, food, and transportation\u2014is necessary to calculate their disposable income.<\/span><\/p>\n

For those in Oklahoma City and the wider state, if the disposable income surpasses a certain threshold, they may not qualify for Chapter 7 bankruptcy but may still be eligible to file under Chapter 13, which sets up a repayment plan. Because this process can be fraught with complexity, Oklahomans considering bankruptcy are often advised to consult with an experienced bankruptcy attorney to help them accurately navigate the Means Test.<\/span><\/p>\n


\nChapter 13 and the Means Test<\/b><\/h3>\n

For residents of Oklahoma City, passing the <\/span>Bankruptcy Means Test<\/span><\/a> is not an absolute requirement to file for bankruptcy relief. When an individual’s income is too high to qualify for Chapter 7 bankruptcy under the Means Test, they can often still seek relief under Chapter 13 of the Bankruptcy Code.<\/span><\/p>\n

Chapter 13 bankruptcy<\/span><\/a>, often known as a <\/span>wage earner’s plan<\/b>, allows individuals with regular income to develop a plan to repay all or part of their debts. Unlike Chapter 7 bankruptcy, which seeks to discharge unsecured debt, Chapter 13 involves a repayment plan, typically lasting three to five years. This option can be particularly useful for those who wish to keep secured assets, like a home or car, which might otherwise be lost in the Chapter 7 process.<\/span><\/p>\n

While the Means Test might not directly apply to Chapter 13 bankruptcy, it does influence the length of the repayment plan. If your income is above the median for a similar-sized household in Oklahoma, you will typically be required to propose a five-year repayment plan. In contrast, if your income is below the median, a three-year plan is generally sufficient.<\/span><\/p>\n

Navigating the nuances of the Means Test and understanding how it applies to both Chapter 7 and Chapter 13 bankruptcy can be complex. Relying on a trusted advice from experienced legal professionals like those at Scott Harris Law, PLLC, can ensure that you make informed decisions and take the right steps toward financial recovery.<\/span><\/p>\n

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What are the Common Mistakes Made on the Bankruptcy Means Test?<\/span><\/h2>\n

The Bankruptcy Means Test can be a complex process, and mistakes are often made. These can affect both your eligibility for bankruptcy and the chapter under which you can file. Here are some of the common mistakes made by Oklahoma residents and how they can be avoided:<\/span><\/p>\n