To qualify for the ability to file for chapter 7 bankruptcy, you must pass a means test indicating you don't have enough money to pay your debts. Unfortunately, the forms you're required to fill out for the means test can be confusing, and it's easy to make mistakes that may negatively impact your eligibility. Here are two common errors petitioners make on these forms and how to avoid them.
Entering the Incorrect Number of Household Members
One of the most common mistakes bankruptcy petitioners make is entering the wrong number of household members on the form. The bankruptcy court uses it to determine what the median income is for a home your size and how your current pay compares, which governs whether you're eligible for chapter 7 and certain deductions.
However, it's an open secret that there is no official definition on who constitutes a household member, which has led to different courts counting household numbers in different ways. For instance, some courts require you to consider everyone living in your home as a member of the household, even if they only live with you part time. Other courts only want you to count people who are financially dependent on you.
A good way to handle this issue is to count people whose expenses you pay for and/or who contribute financially to the family's needs. You would still count a child as part of your household that you pay child support for, even if that kid only lived with you 6 months out of the year, for example.
It's a good idea to consult with a bankruptcy attorney in your area for help with this issue, because the lawyer will be familiar with how the local courts determine who count's as part of petitioners' households and can help you figure out who qualifies.
You List Income You're Not Actually Receiving
Another mistake many people make on their bankruptcy means forms is listing income they're entitled to receive but actually aren't getting. This most commonly occurs with people who were awarded support orders but the other party is not actually pay the amount due. For example, your ex is ordered to pay child support, but the person has not paid you in months.
Income is only considered as such when you are actually receiving those checks. Thus, do not include income sources in cases where you're not getting the cash.
For assistance with deciphering and filling out the bankruptcy means test or help with other bankruptcy related issues, contact a local attorney.Share