While Chapter 7 bankruptcy is the most common form of debt relief when filing for an Ohio bankruptcy, not everyone will qualify. In order to be eligible for Chapter 7 bankruptcy protection, you must pass the bankruptcy means test. The means test is meant to give the bankruptcy court and trustee insight into your household size, income, expenses, and assets, but because it’s a long and complicated form, mistakes can sometimes be made when filling it out. Here is a list of common Chapter 7 bankruptcy means test mistakes and how you can avoid them in order to ensure you obtain the debt relief you desire.
Deduction Mistakes on Means Test
Two common mistakes individuals make on the means test is taking deductions that are not allowed in Dayton bankruptcy and/or not taking deductions that are allowed. A few items that you cannot deduct are retirement account contribution, 401k loan repayments, and college expenses for your children. On the other hand, allowed deductions should be taken advantage of and things such as court order payments and home taxes and insurance not escrowed are among the most forgot deductions that could make the difference of passing the means test or not. Pay close attention to each deduction and make sure you consult your Dayton bankruptcy attorney if you have questions about any deduction.
Household Size Mistakes on Means Test
The chapter 7 bankruptcy means test takes into account your household size and can have an enormous impact on your qualifying for Chapter 7 bankruptcy. Household size on the means test is used to determine bot the median Ohio income you compare your income with and the standard deduction amounts you can claim for expenses. Even though household size seems like a fairly straightforward affair, different bankruptcy courts use different standards on how counts as a member of your household. By using a local bankruptcy attorney, you have an inside knowledge of how the bankruptcy Trustee and Judge treat this important factor and thus will save yourself from making a mistake on household size.
Income Calculation Mistakes on Means Test
Another extremely common mistake made in the Chapter 7 bankruptcy means test is the miscalculation of income. When you fill out your income on the means test form, you must have accurate documentation backing it up, and these numbers must match up meticulously. Many bankruptcy filers run into issues with appropriately estimate average income, as the means test takes into account the last six months of income prior to filing. The period used ends on the last day of the calendar month before your filing date, so it’s important to pay close attention to the dates on proof of income and ensure that you follow the instructions stated on the means test.
Filing for Chapter 7 bankruptcy can be complex and difficult, but it doesn’t have to be. By hiring a Dayton Ohio bankruptcy attorney, you’ll have access to the ins and outs of how your local bankruptcy court treats matters, in addition to, a wealth of legal knowledge of bankruptcy law and how the bankruptcy process works. Additionally, because of the long-term personal and financial implications surround filing for Chapter 7 bankruptcy, you want to make sure your rights are represented by someone who is well versed in Ohio bankruptcy and federal bankruptcy laws.