Do I have to take the "Mean's Test" Under Florida Bankruptcy Law?
Many debtors are excluded and unable to qualify for Chapter 7 bankruptcy. The new laws of 2005 made it much more difficult for debtors to file for protection under chapter 7. With the passage of the mean's test provision in 2005, if debtor's made over the state median income, then they would be forced to pass the "mean's test" which takes into account disposable income, or in many instances the lack thereof. If the debtors' disposable income is too high, then there would be a "presumption of abuse."
This presumption can be defeated but it is rare and in most instances not worth the debtor or debtor's counsel to defend or fight the presumption. In some instances, the debtor may not have to worry with the mean's test. If the debtor is a "disabled" veteran (defined under the bankruptcy code), the debtor does not have to take the mean's test. If the primary cause of the bankruptcy is business debt, the debtor does not have to take or pass the mean's test. If the debtor's total household income is less than the state median income, then the debtor does not have to take or pass the "mean's test." Just because the debtor does not pass the mean's test in one month, does not necessarily mean he or she will not pass the following month or shortly thereafter.
The bankruptcy court and the Trustee's office look back to six months worth of pay stubs to determine if the debtor qualifies for chapter 7. If the debtor's total household income is less than the state median income, does the debtor have to file a chapter 7? Absolutely not. The debtor must have a steady income and the 13 plan must be reasonable and feasible. If the plan is neither, the case can be dismissed or ordered to convert to a chapter 7. It may or may not be in the debtor's best interests to convert to a chapter 7. It depends on the amount of debt, the nature of the debt, whether or not the debtor has a substantial amount of unpaid assets, and whether or not the debtor qualifies for a chapter 7. Before converting to a chapter 7 or a chapter 13, you should speak with an experienced bankruptcy attorney. If the case is dismissed, can I refile? As long as the case was not dismissed for fraud or misrepresentation and you have not filed on multiple occasions within a short period with a bad faith intent.
If you have questions about Florida Divorces or Bankruptcy Law contact a Florida Attorney
Greg Gilbert
Keith Maynard
