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Everyone who files must participate in the new means test. The
changes in new bankruptcy rules include quite a few new requirements
designed to augment the ease at which trustees and courts may conduct a
thorough review of income, debts, and financial ratios. The assimilated
rules are collectively referred to as means test requirements. The
following represents a few of the most obvious new rules and changes:
Pre Conditions For the Means Test:
- Debtors must participate in mandatory budget analysis before
filing.
- All people who file must provide filed tax returns for the prior
taxable year.
- Pay stubs must be provided to prove employment, if available.
Application of Means Test Rules:
- Anyone who earns less than the median income, reported by the U.S.
Census Bureau, for their state of residency may file Chapter 7 or file
a three year Chapter 13 plan if paying less than all debts owed.
- Anyone who earns above their state's median income (annualized by
proof of average income over the last 6 months), may be able to file
Chapter 7 if satisfying two additional requires: a) unsecured debts
are greater than disposable income, times 60, and b) disposable
income, times 60, is less than $10,000.
Disposable income calculations are now determined by statute, an new
schedule of approved expenses, and a few of the typically larger
consumers expenses from historical financial records (homes,
transportation, etc.).
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