Given the uncertainties in the legal community about how to apply the means test, I can’t imagine a non lawyer learning anything reliable from trying to do this themselves. As a certified bankruptcy specialist, I end up thinking, and rethinking, treatment of income and expenses on the means test.
Yet the results of the means test determine whether you get to choose which chapter of bankruptcy you want to file, or how much you have to pay if you file Chapter 13.
Means test rat’s nests
The tricky issues include how to deal with income from non filing spouses; from roommates or extended family members; shared custody situations; changing income issues, and how to handle business expenses for the self employed.
One bankruptcy appellate panel recently decided that the judges who drew up the form did it wrong! That really helps.
You have to parse out income “received” but not “derived” during the look-back period and figure out how to report children where custody is shared.
Then there is the dispute on the deduction side about ownership allowances for paid-for cars; operating allowances for older cars; debts associated with property you’re surrendering, and just what part of your telecommunication expenses go on the form.
And how do you treat the costs of delayed health care needed in the future? Do you divide that cost over the life of a Chapter 13 plan, or over 12 months, or….?
Can you swear to that?
I cringe when I ask a client to sign this form, as they cannot possibly validate all of the entries on the form, given the complexities of the law.
While I won’t say “don’t try this at home”, I am certain you should draw no conclusions about the means test and your eligibility for Chapter 7 based on your efforts to take the test.
Get an experienced bankruptcy lawyer involved.
Image courtesy of Pixabay.