Bankruptcy Tip – Plan Your Bankruptcy Filing Date Carefully
There are a lot of factors that have to be taken into consideration before filing for bankruptcy, and one of the most important is deciding on what date you will file. I know this may sound strange to many, however, the date you file becomes the key point in every other aspect of the bankruptcy process. A good example of this is the test for your current monthly income.
You may feel that your current income is zero if you are out of work and only receiving a small social security payment. After all, social security payments are exempt from income calculations. Unfortunately, under bankruptcy law, your actual income today is not considered to be your current monthly income. This figure is calculated by totaling all of your income over the last six month and dividing it by six. If your income was $3,000; $3,000; $3,000; $3,000; $0; and $0; then your total for the six months is $12,000 and your current monthly income determined to be $2,000.
Coming back to that concept of date, that six monthly income figure is for the six months prior to filing for bankruptcy. If you were to wait one month, your total income would be $9,000 and your current monthly income set at $1,500 ($9k divided by 6). Wait another month (assuming you are still unemployed) and your current monthly income will be just $1,000.
You can only file for a Chapter 7 petition for bankruptcy if your current monthly income meets the means test for your state. Under a Chapter 13 petition for bankruptcy, if your current monthly income is assessed as being above the state’s median, then you will have to enter into a five year repayment plan. If your current monthly income is assessed as being below the state’s median income, then you will only need to enter into a three-year plan.
A bankruptcy attorney can help you determine when you should file for bankruptcy. If you are being pressed by creditors, then your attorney may be able to hold them off for a short period in order to get a better current monthly income assessment. This is one area of bankruptcy law where one or two days could have a huge impact on your bankruptcy petition.
Related posts:
- Think Carefully Before Filing For Chapter 13 Bankruptcy
- Changing Bankruptcy Chapters At A Later Date
- Get To Know The Debt Priorities Under A Chapter 13 Bankruptcy Payment Plan
- Chapter 13 Bankruptcy Petition – An Interest Free Payment Plan With Bonuses
- Four Ways To Change or Terminate A Chapter 13 Bankruptcy Plan
August 2nd, 2011 at 7:44 pm
Before even analyzing the means test you should also analyze the nature of your debts. If most of your debts are business debts, then the means test does not even apply to your situation.