Do Your Own Taxes - Fee from Refund
Bankruptcy
Claiming Social Security Disability


Death & Taxes

We have Information to Help You with Either


Got Question for a CPA Mom?


IRS wants you to retire Financially Free!     We will answer your questions and give you options about how to become Financially Free when you retire

Tax answers/options when you sell your Home.      We will answer your questions about the tax free home sales and give you options on tax free exchanges

So, You got a letter from IRS?  We can help.    Letters from IRS are scary. We will answer your questions at no charge.

S-Corp, LLC, C-Corp, Partnership - Your Choice?    Selecting the correct Business Entity is confusing.  We will give you the tax options of each Business Entity.

How not to pay taxes when you sell income property.    We will explain how to do a tax free exchange & not pay taxes when you sell your income property.

To pay for Services - Please click on Paypal Logo below

FREE 2008 CPA Moms Tax Review Details
Divorce & Taxes
Offer in Compromise
Installment Payment for Taxes
Credit Reports
Social Security
Do Your Own Taxes - Fee from Refund
Deliquent Tax Returns
Garnishment
Retirement Planning
FREE 2008 Tax Return Review Details
CPA Moms Master Index
Alimony Deductions
Moving Deductions
Contribution Deductions
Job Hunting Deduction
Education Deductions
Adoption Deductions
Medical Deductions
Mileage Deductions
Car Donation Deductions
Bad Debt Right Off
Hybrid Cars Deductions
Educator Deductions

 


Bankruptcy Means Testing Under the New Bankruptcy Law
Jameson Joyce

The rush to file bankruptcy ahead of the new bankruptcy law is over. Now what? Did you miss the boat if you didn't file bankruptcy before the new law went into effect?


Absolutely not. Although the new bankruptcy law has made it much more difficult to file bankruptcy, most attorneys are finding out that the new bankruptcy law is manageable and filings are on the rise.


One of the most confusing parts of the new bankruptcy law is the bankruptcy means test.


In an effort to stop bankruptcy abuse, Congress decided to implement a step to the bankruptcy process called the "bankruptcy means test".The new bankruptcy law requires a test to be performed by every debtor prior to filing bankruptcy. The actual test is alot like doing your taxes. The means test revolves around the median state income for the state in which the debtor will file bankruptcy.


The bankruptcy means test is used to determine what type of bankruptcy a debtor can file. The bankruptcy means test is an attempt to make chapter 7 available to only those debtors who absolutely need to file a chapter 7 bankruptcy. Most people trying to file bankruptcy want to try to file a chapter 7 bankruptcy which can wipe out most debt quickly; a chapter 7 case is usually completed in about 90 to 120 days with no required repayment plan. The other type of consumer debtor bankruptcy is a chapter 13 bankruptcy which requires a debtor to make repayments to the bankruptcy court over the course of 3 to 5 years.


The means test is designed to weed out those people who don't really need to file a chapter 7 in the hopes that more people will have to file a chapter 13 bankruptcy and pay all, or a portion, of their debt back to their creditors through a court ordered repayment plan. Remember, the new bankruptcy law was funded by creditors so it only seems logical that the law would encourage the repayment form of bankruptcy.


The actual means test can be quite simple if a debtor is below their median state income. If a debtor is below the median income for their state, the debtor can file a chapter 7 bankruptcy. Debtors who exceed the median income may still be able to file a chapter 7 bankruptcy but they must complete several additional steps in the test that are far more complicated. If a debtor fails the means test, the debtor is not prohibited from filing. However, a debtor who fails the test cannot file a chapter 7.


To find your median state income and learn more about the new bankruptcy law, visit bankruptcyhelponline.org.



Jameson Joyce is a legal writer for legalhelponline.org and Direct Lex, the global legal resource solution.

 


 

 

Main Menu

Recorvery Rebate Credit
Mileage Deductions
Car Donation Deductions
Bad Debt Right Off
Hybrid Cars Deductions
Tax Cash Today at Western Union
CPA Moms - Services Offered
Tax Preparation
Electronic Filing
FREE IRS Forms
Enrolled Agents
Tax Moms
Recovery Rebate Credit
CPA Moms
Representation before IRS
Non Profit Tax Services
Accounting
Bookkeeping
CPA Loan Letter
$7500 Downpayment for your Home
Offers-in-Compromise Home Page
Latest Offers-in-Compromise
Offers-in-Compromise Articles
Additional Resources
Want to Joins theTax Moms?
Questions for CPA Moms?

About Us  ......  Disclaimer ..........           Copywrited 2005  - 2006 & Developed by  Tax Net Inc