Bankruptcy Means Test
Understanding The Bankrupcy Means Test
Calculating Disposable Monthly Income:
To calculate your disposable monthly income, you simply deduct your expenses,
including mortgage payments or rent.
bankruptcy attorney should be consulted to determine if you are required to file for Chapter
13 Bankruptcy, but to get a rough estimate of your disposable monthly
income (DMI) take your six month average income and subtract all allowable
expenses. Expenses can include: mortgage and rent, past due taxes, priority
debt, secured debt and $1,500 in private school tuition. If the difference
is more than $166.66 per month and $10,000 of the debt owed could be paid
with in 5 years, you are required to file for
Chapter 13 Bankruptcy. If not, additional calculations must be made.
The next calculation is used to determine if you will have more than $100
per month to pay at least 25% of your unsecured debt to creditors over
the next 60 months. If you do, then you will be required to file for Chapter
13 Bankruptcy, if you do not, then you can file for Chapter 7 Bankruptcy.
If a judge determines that you have "extenuating circumstances,"
he or she may determine that you are eligible to file for Chapter 7 Bankruptcy
regardless of the outcome of the calculation.
For more information call us at 866-210-1722 or fill out the form below.