STEP TWO: If your current monthly income is greater than the median income for your state and household size, there is, in technical terms, a “presumption of abuse.” In order to rebut the presumption, or in other terms, to pass the means test by using the second step, the means test’s second section allows you to subtract from your current monthly income certain allowable and deductible expenses. These allowed deductions include, but are not limited to, expenses for living (mortgages and property taxes), transportation (car loans and car taxes), health insurance and charitable donations. After the calculations are performed, and the allowed deductions are taken, and if you then have no disposable monthly income available, you will than have passed the Means Test (with no presumption of abuse) and may file a Chapter 7 Bankruptcy. If, on the other hand, you do have remaining disposable income, you may consider a Chapter 13 Bankruptcy or Bankruptcy alternatives.
The discussion above is an overview of the Means Test in basic terms and is in no way intended as a specific analysis of your personal financial circumstances.
For an analysis of your own financial circumstances, please contact Attorney Theresa DeGray at 203-713-8877 to schedule your free consultation.