Boise Bankruptcy Lawyers—Kershisnik Law, PLLC—Call Now, (208) 472-2383

Do you qualify for bankruptcy?—Chapter 7—Chapter 13

(208) 472 - 2383

380 S. 4th Street, Suite 102 Boise, ID 83702

Patrick Kershisnik, Attorney & Counselor

Idaho Bankruptcy Means Test—

Idaho Bankruptcy Means Test

for Bankruptcy

What the Means Test Means to You

As discussed on our Bankruptcy page, to qualify for a Chapter 7 Bankruptcy you must meet an income "means" test. If you fail to meet the means test, and you still want to file for bankruptcy your option as an individual is to file for Chapter 13 Bankruptcy. Chapter 7 allows you to discharge your debt whereas Chapter 13 allows you to cure defaults, reamortize loans and set up affordable repayment plans.

Your First Step

Before you can proceed with your Bankruptcy you must first determine if you are even subject to the means test. In order to do this you must compare your last six month's of income to the state's average income. If your income, from all sources, is below the average, you automatically qualify for a Chapter 7 Banrkuptcy and do not need to take the means test. If your income is above the state's average that does not mean you do not qualify for a Chapter 7 Bankrutpcy, but it does mean that you need to complete the test to determine if you qualify.

Considering Monthly Expenses

According to the means test you first must deduct your monthly expenses from your current monthly income. This does not mean, however, that you get to take all of your monthly expenses into account. There are specific recognized expenses that apply, such as standardized IRS deductions. This is to prevent an individual who actually should take a Chapter 13 Bankruptcy from reducing their income to fit into Chapter 7 guidelines.

If after your qualifying monthly expenses you have $100 or less of "disposable income" you "pass" the means test and qualify for Chapter 7 Bankruptcy. If after your montly expenses you have more than $166.67 of extra money, you must take a Chapter 13 Bankruptcy. So what happens if your left over income is in between $100-$167.67? You can potentially qualify for a Chapter 7 IF your disposable monthly income multiplied by 60 is less than 25% of your nonpriority unsecured debts (this means things like credit card debt).

Income Threshold for Idaho

As of November 1, 2011 the Income Threshold for the means test for a family* in Idaho are as follows:

Idaho

Single

2 Persons

3 Persons

4 Persons**

$39,120

$49,242

$52,077

$61,301

* In general a family is defined as those members who are a part of your family and who live with you. As a rule of thumb, those people who you can deduct for tax purposes.

** For every additional family member add $7,500

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We are a debt relief agency. We help people file for bankruptcy relief under the bankruptcy code.

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