Law Offices of:
Robert N Zimmerman, Jr.
(813) 655-4900                                           
1106 N Parsons Ave., Ste 202                                                                                        
Brandon, FL 33511



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                                                                                                 Serving Hillsborough, Pasco and Pinellas Counties

        Robert N. Zimmerman, Jr. (813) 655-4900
                                                                             

Can Bankruptcy Help?

Means Testing Information
Chapters 7 & 13

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Bankruptcy Means Testing
Means Testing became part of the Bankruptcy Code with the amendments that went into effect in year 2005. There is a Means Test for Chapter 7 and a different Means Test for Chapter 13. Both cover the same material for the most part but they have different functions. A Chapter 7 Means Test makes a determination regarding a presumption of abuse. If according to the Chapter 7 Means Test an individual could fund a meaningful Chapter 13 plan then a presumption of abuse arises.  

It should be noted that the Chapter 7 Means Test only applies to consumer debtors. If an individuals debts are primarily business or otherwise non-consumer then the Chapter 7 Means Test does not apply to them.

As for the individual consumer debtor, the Chapter 7 Means Test compares that individuals household income to a median annual income. Household income does include the income of both spouses even if only one spouse is filing the bankruptcy. This may seem unfair but there is a marital adjustment later in the Means Test. 
 
A median income is determined by household size and the state where the individual resides. In Florida, at the time of this writing, May 3, 2012, the annual median incomes are:
$42,053.00 for a household of 1
$51,299.00 for a household of 2
$57,470.00 household of 3 and
$66,250.00 for a household of 4.
Add $7,500.00 for each individual in the household in excess of 4. 

All is not lost if your household income initially exceeds the median. The Chapter 7 Means Test allows for many reasonable deductions that may reduce an individual's disposable income to a point where the presumption of abuse dose not arise.

If the Means Test does apply and the presumption of abuse still arises even after taking the allowed deductions then filing a Chapter 7 Bankruptcy runs the risk of a motion to dismiss being filed with possible adverse consequences. There are only limited circumstances under which the presumption of abuse, if it arises, can be rebutted. A Chapter 13 should be considered when the presumption arises.

Chapter 13 Means Testing has a different function. Like the Chapter 7 Means Test it to checks to see if an individual's income exceeds the median income and after taking into account the applicable deductions it determines disposable income. However, in this case the disposable income is the amount that presumptively should be paid to the unsecured creditors each month during the Chapter 13 plan. The Chapter 13 Means Test also determines if the debtor should presumptively be in a Chapter 13 plan that is 60 months long or 36 months long. 

 Median Income Table
Official Chapter 7 Means Test Form
Official Chapter 13 Means Test Form  


Next Page for brief description of the differences between Chapter 7 & 13

The author of this website is a lawyer licensed to practice in the state of Florida and the U.S. District Court, Middle District of Florida. It is against the law and unethical to provide legal advice or otherwise practice law in a venue where the attorney is not licensed. All of the bankruptcy information contained in this website is provided for educational purposes only. Please bear in mind that state law effects bankruptcy issues. General education helps people understand bankruptcy but it is not a substitute for legal advice by a competent attorney licensed in the state and the Court where a person files bankruptcy. Further, not all Bankruptcy Courts interpret the U.S. Bankruptcy Code the same way. Consequently, counsel familiar with the court that the petition is filed in is very important. 


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Offices in Brandon Florida                                         is an important decision                        We help people file for bankruptcy 
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