Confused about "Means Test" for bankruptcy

**SeekingAnswers** · 01-23-2011, 04:40 PM

We haven't decided on bankruptcy, but we're doing all of our research on every angle possible, so we're filling out all the "homework" paperwork given to us by the lawyer and I also tried to do a "Means Test" online, which left us totally confused.

The test required me to indicate mine and my spouse's gross monthly income - logically. It requires us to indicate monthly mandatory expenses - Household, Health, Paycheck Deductions, etc. It requires us to indicate any "SECURED" debts. But NOWHERE on the test does it allow for you to indicate any "UN-SECURED" debts (which is our biggest problem right now).

I completely understand the logic of looking at "available, disposable income," but if they don't allow for you to indicate "UN-SECURED Debt," then the immediate conclusion is automatically "FAIL for Chapter 7" and forced into Chapter 13. It didn't make sense to us at all and we are so confused.

We're hoping that our lawyer will still answer a few more questions for us (on his dime) before we commit to actually paying a retainer fee and officially filing - which is something I have NOT decided to do yet. We are currently looking at ALL of our budgeting options from every angle, but want to make sure we make an educated decision.

If anyone has any thoughts or previous experience with such things like:

One spouse filing, but not the other
Filling out Means Tests
Determining if you qualify for Chapter 7 or 13

Please feel free to jump in to share.
Thanks so much.

**HappyMama** · 01-23-2011, 04:49 PM

Here is a formula for Chapter 7, and some links that help you determine means test, qualification etc. It has information regarding non secured debt. Hope this helps . Will try to find more to help.

Chapter 7 Means Test, Bankruptcy income and expenses, Eligibility rules for Chapter 7 Bankruptcy

Here is the FTC site and the new laws for bankruptcy, though you might already have this .

http://www.ftc.gov/bcp/edu/pubs/cons...dit/cre19.shtm

**Greebo** · 01-24-2011, 07:08 AM

Unsecured debt isn't included because then it would be far too easy for dishonest people to run up huge credit card bills and then just declare bankruptcy.

**krbshappy71** · 01-24-2011, 08:20 AM

disregard my posting, I answered my own question.

I was looking for an online test.

I found one and took it.
Secondary presumption determination
You Pass the Median Income Test
Because your family income does not exceed the median income for a family of similar size for your state, the presumption of abuse in your case does not arise. You can file for Chapter 7 or Chapter 13 Bankruptcy.

NICE!! But I wont. I'm way too stubborn or naive to believe that I can't pay this back. Interesting that they would let me, though, just 'cause I don't make much income. *shrug*

**Shelli_wnj** · 01-24-2011, 08:37 AM

Seekinganswers - we filed bankruptcy about 2 years ago, and at that time the lawyers suggested we file together for 2 reasons. 1. Most of the debt was in both names and 2. because we are married, if one files, it affects the other's credit as well. again these are not my educated opinions, just the info my lawyer gave to me. I would definitely ask a lawyer in your particular case what would be best for you.

Edited to add: I just want to note that I do not advocate bankruptcy - if I had it all to do over again, I might had tried differently. Again, it pertains directly to your situation, but I just don't want to make it seem like an easy decision. I could go on and on, but I will stop there. I pray you are able to come to the best decision for you.

**SeekingAnswers** · 01-24-2011, 07:18 PM

Originally Posted by Shelli_wnj

Seekinganswers - we filed bankruptcy about 2 years ago, and at that time the lawyers suggested we file together for 2 reasons. 1. Most of the debt was in both names and 2. because we are married, if one files, it affects the other's credit as well. again these are not my educated opinions, just the info my lawyer gave to me. I would definitely ask a lawyer in your particular case what would be best for you.

Edited to add: I just want to note that I do not advocate bankruptcy - if I had it all to do over again, I might had tried differently. Again, it pertains directly to your situation, but I just don't want to make it seem like an easy decision. I could go on and on, but I will stop there. I pray you are able to come to the best decision for you.

Thanks so much. I am fighting against the bankruptcy option as hard as I can because I just don't believe it is the best move UNLESS life absolutely depends on it. I'll live on crackers and water before feeling completely comfortable making that move. I am just looking at information from BOTH options to make an informed and educated decision and to be fair to dh because the burden is very-much his as well, and if *I* decide to suck it in and live BEYOND frugal, then it affects him as well, so I don't want to jump to ANY hasty decision. However, I am in complete agreement with you.... totally against bankruptcy unless there are absolutely no other options available.

Thanks so much for sharing.

**Greebo** · 01-24-2011, 07:42 PM

Having seen your budget, you are not bankrupt. You have a lot of debt but you also have opportunities to fix the problem.

Bankruptcy will not solve anything for you until you and DH solve the behaviors that got you here - and if you fix those behaviors, you won't need BK anyway.

I STRONGLY encourage you to read "The Total Money Makeover" by Dave Ramsey - and get DH to read it too. DH will relate to DR - DR is an entrepreneur like your DH.