Filing for Chapter 7 Bankruptcy in San Antonio, allows a debtor to legally eliminate loans, medical bills, dismissible income taxes, credit card debts and other unsecured debts. However, sometimes, debtors file chapter 7 bankruptcy in order to get rid of a lawsuit, stop creditor harassment, or just to have a clean slate when it comes to finances. In spite of having various reasons, eligibility is the most important requirement in debtors filing for a Chapter 7 Bankruptcy in San Antonio.
The vast majority of debtors filing for Chapter 7 Bankruptcy in San Antonio get qualified. But, the eligibility to file a Chapter 7 Bankruptcy depends on the debtor’sdaily expenses, his income and most importantly, his debts. Taking the bankruptcy means test is compulsory for filing a “personal” or “consumer” Chapter 7 Bankruptcy. All Chapter 7 debtors are required to take the Bankruptcy means test to ensure that the debtors aren’t “abusing” the system.
The bankruptcy means test is set based on the income of a median household in the debtor’s specific area, in the state of Texas. All of the debtor’s income preceding the 6 months before the petition was filed, is looked at during this test. The average monthly income of the debtor is determined and the amount is then multiplied by twelve. The test breaks down the median income to the debtor’s specific Texas area zip code. The test then compares the amount to the median income in the household which is of a similar size. The latest US Census Bureau reports are consulted as the basis of the particular median income. If the debtor is over the median income, then another set of tests are arranged at the end of the month to pick out the disposable income of the debtor, if any. The Bankruptcy means test is considered the primary factor in determining the eligibility for filing for chapter 7 bankruptcy in San Antonio.
However, if after the Bankruptcy means test, the debtor’s case is dismissed for abuse by the U.S. Trustee, because the debtor has too much disposable income, the debtor can be defended against that action by illustrating the special circumstances that apply in his case and how. The special circumstances are required to increase their expenditures, or reduce the income to a level to allow the debtor to qualify the means test. However, a support for the special circumstances has to be established by providing necessary documentation for the expense(s) with detailed relevant explanation.
Even though most people filing for Chapter 7 Bankruptcy in San Antonio might be eligible, it is important that an experienced San Antonio Bankruptcy Lawyer is consulted to explore all the options to be rid of debts. If the debtor fails the means test being above the median income or fails the means test by a very minimal amount then the case can be looked at more closely to decide if filing for chapter 7 bankruptcy is the option for him.