If you are contemplating filing for bankruptcy, the Missouri Chapter 7 means test may come into play in order to determine your eligibility. Bankruptcy incorporates federal law and state law—both of which can be very complex. If you are contemplating filing a Chapter 7 bankruptcy, you need an attorney on your side who knows and understands the law. The attorneys at the Law Offices of Kenneth P. Carp are ready and willing to assist you with making an informed decision about filing for bankruptcy.
Determining Household Median Income
If your household income is below the Missouri median income for your household size, you are exempt from taking the Missouri Chapter 7 means test. Consequently, you may file a Chapter 7 bankruptcy.
Average monthly household income is determined by averaging your monthly income over the past six calendar months. That number is then multiplied by 12 to determine your annual household income. The annual median household income thresholds in Missouri range from $40,994.00 for one-member households to $120,830.00 for ten-member households.
If your household income exceeds the median income threshold for a household of your size, you must complete the Chapter 7 means test.
Taking the Chapter 7 Means Test
The Chapter 7 means test involves calculating all of your household income and expenses for a given year. For purposes of the means test, ‘income’ includes business income, rental income, interest and dividend income, pensions, retirement plans (i.e., 401(k) and 403(b) retirement plans), money paid by others toward household expenses, and unemployment income.
Once you have determined the amount of your household income for the year, you must subtract out your total expenses. This final number determines the amount of income you have available under the bankruptcy laws to pay your unsecured creditors.
The final determination is as follows:
- If your total monthly income for the next 60 months is lower than $7,475.00, then you may file a Chapter 7 bankruptcy.
- If your total monthly income for the next 60 months is over $12,475.00, then you may not file a Chapter 7 bankruptcy.
- If your income is between those amounts, then you need to do further calculations to determine whether or not you are eligible to file for a Chapter 7 bankruptcy.
Contact a Missouri Bankruptcy Lawyer Today for an Initial Consultation
A good bankruptcy lawyer can help you evaluate and consider all your available options under the law, taking into account your personal circumstances and finances. To schedule a free consultation with a St. Charles or St. Louis bankruptcy lawyer, please call us or contact us online.