Under the 2005 Bankruptcy Act, the government established a means test to determine whether consumers qualified for this debt-relief option. However, in Pennsylvania, consumers have a few exceptions that are not available in every state. According to the national means test, they would not qualify for Chapter 13 if they possess an income that is less than $58,605, which is the average for Cumberland County. By contacting a The Law Offices of Serratelli, Schiffman and Brown, P.C, the consumer may qualify based on the Pennsylvania exemptions and eligibility requirements.
The Pennsylvania Means Test
First, attorneys consumers who are exempt from the means test based on Pennsylvania bankruptcy laws. This includes any consumer whose debts are not comprised of creditor debts primarily and disabled veterans who incurred this debt while on active duty. These individuals qualify for Chapter 7 without the need of these calculations.
Household income is calculated by adding all sources of income. This includes wages from employment; self-employment based profits, social security or disability payments, and any dividends produced from stocks or savings accounts. The consumer must provide proof of these income sources for the last six months.
The means test for the state is calculated based on the consumer’s household size, and the median income based on the family size. The calculations for the test are based on the last six months prior to making an attempt to file for bankruptcy. Once the attorney determines the average monthly income after adding up his or her income for these months and dividing by six.
Then the attorney establishes the average annual income by multiplying this figure by twelve. This income level is compared to the annual average income that matches the household size for the consumer. For instance, if he or she is married with two children, they are required to have an average income greater than $81,961. If this is the case, the consumer is eligible for Chapter 13 bankruptcy and may file a claim through the court.
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