What income is Considered for Chapter 7 Qualification Purposes?
There are income limits and qualifications for chapter 7 bankruptcy. The income limits are set by each particular state median incomes. However, not all "income" is considered or used in calculating the total household income.
For example, social security, unemployment, and VA military income is not considered "income" for mean's test and qualification purposes. If your income level is over the state median income, then the debtor must pass what is called the "mean's test."
The mean's test looks at the debtors income, expenses, and disposable income. If the disposable income is too high (and their are guidelines for this) then a presumption of abue arises if that particular debtor wants to file for bankruptcy. If the majority of a debtor's debt is business related, the debtor does not have to pass the mean's test.
The legislative purpose behind this theory is that we do not want to discourage small business owners from trying to open or start a business. If debtors were not able to discharge debts connected with trying to run and operate businesses, it would deter people from trying.
If you have questions about Florida Divorces or Bankruptcy Law contact a Florida Attorney
Greg Gilbert
Keith Maynard
