White House Bankruptcy Lawyer

Financial hardship can strike anyone, sometimes without notice. This can be due to job loss, medical emergencies, or unexpected expenses that pile up and become unmanageable. When this happens, some look to bankruptcy for relief. However, with so many myths about the process and its impact, it can hold some people back from receiving the relief they so desperately need. To help debunk these myths, hire a White House bankruptcy lawyer to work for you.

At Kerney Law Firm, we believe that bankruptcy is not the sign of the end but rather the first step toward a new life. Our team is committed to helping you achieve that next step, free from the financial burdens currently holding you back. With years of experienceguiding consumers like you through the bankruptcy process, we are here to ensure you can make the most informed decisions possible that lead to long-term financial stability.

What Is Involved in a Bankruptcy Means Test?

The bankruptcy means test is a critical part of the process to determine whether or not you qualify for Chapter 7 bankruptcy. This is where unsecured debt, such as credit card balances and personal loans, would be discharged. The test is designed to assess whether a filer has the financial means to repay their debt through a structured repayment plan under Chapter 13 bankruptcy or if they genuinely need full debt relief under Chapter 7.

Step 1: Comparing Your Income to the State Median

The first part of your means text will examine your household income over a designated period of time and compare it to the median income for a household of the same size in Tennessee. If it’s discovered that your income is below the state median, you are most likely to be qualified for Chapter 7 and will not be required to take the second portion of the test. If your income is above the median, you will need to proceed to the next step to prove your financial challenges.

Step 2: Calculating Disposable Income

If your income exceeds the state median, you will then need to calculate your disposable income. This is the amount left over after deducting all necessary expenses. This calculation determines whether you have enough income to make payments to a creditor under Chapter 13. The means test will allow for deductions of specific expenses that are allowed, which include:

• Housing and utilities, such as rent, mortgage payments, and property taxes.
• Food and household necessities based on IRS standards.
• Medical expenses, such as regular and necessary medical costs not covered by insurance.
• Transportation costs, including car payments, gas, insurance, and maintenance.
• Child support or alimony if either of these court-ordered arrangements are active.

Step 3: Determining Chapter 7 or Chapter 13 Eligibility

After this process, if your disposable income is low enough, you may still qualify for Chapter 7, which would allow for a full discharge of your unsecured debt. If not, that means the court believes you have the means to start paying some of your debt back. At this point, they will issue a repayment plan.

Contact Kerney Law Firm Today

If you are currently struggling with debt and are curious to learn more about which bankruptcy option could be a good fit for you, contact our firm today to get the process started. We look forward to hearing from you and sharing more about how we can help.