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What Happens If I Fail the South Carolina Bankruptcy Means Test?

What Happens If I Fail the South Carolina Bankruptcy Means Test?

As we’ve discussed in previous articles, if you plan to file bankruptcy in South Carolina, you must take a bankruptcy Means Test. You can either do this on your own or engage the services of a bankruptcy attorney. If after taking the Means Test you do not qualify for Chapter 7 bankruptcy, your bankruptcy lawyer will likely encourage you to explore alternative options such as Chapter 13 bankruptcy. However, there are also other approaches that can help overcome a failed Means Test.

After carefully considering your income, expenses, and overall financial situation, your bankruptcy lawyer may suggest exploring the options of refinancing a home, selling a car, or negotiating with creditors to reduce monthly bills. A bankruptcy attorney can assist in evaluating your financial situation and determine if there are any legal strategies that might enable you to pass the Means Test.

Failing the South Carolina bankruptcy Means Test can be a frustrating and overwhelming experience. However, individuals must not give up hope. You can explore all of your options with the assistance of an experienced bankruptcy attorney. At the Drose Law Firm, our bankruptcy lawyers understand the complexities of the bankruptcy process and will guide you through your options. If you plan to file bankruptcy, Charleston residents and individuals throughout South Carolina have been utilizing us for more than three decades to handle their debt resolution cases. Are you ready to stop creditors from calling and free yourself of the stresses associated with being in debt? If so, give us a call to schedule a consultation today.

Fail The South Carolina Bankruptcy Means Test

What Factors Would Cause Me to Fail The South Carolina Bankruptcy Means Test?

Filing for bankruptcy in South Carolina is a complex and challenging process, which is why many people consult with a bankruptcy attorney to discuss their situation. As we’ve discussed in previous articles, before filing bankruptcy, you must first pass the South Carolina bankruptcy Means Test to determine your eligibility for Chapter 7 bankruptcy. Your bankruptcy lawyer will facilitate the Means Test which compares your income to the state’s median income to determine if you have enough disposable income to repay your creditors.

The Means Test examines your monthly revenue for the six months preceding your bankruptcy filing. This includes all forms of income such as salaries, dividends, etc. Then, certain priority debts such as alimony, child support, and taxes are deducted from your monthly income to determine your disposable income.

Reasons for failing the Means Test include:

High Income or Expenses

If your individual income is higher than South Carolina’s median income level for your household size, you may fail the means test. In addition, if your necessary expenses such as mortgage payments, car payments, and other bills are too high, it can push your disposable income over the threshold.

Errors or Mistakes

Filing the Means Test requires detailed information. Even a simple clerical error can throw off the results. Miscalculations of income, expenses, or debts can result in an inaccurate assessment of the individual’s income and their eligibility for bankruptcy.

If you plan to file bankruptcy, Charleston residents and those in surrounding areas have trusted the bankruptcy attorneys at the Drose Law Firm to conduct the South Carolina bankruptcy Means Test and handle their bankruptcy filings. If you plan to file bankruptcy now or in the future, our bankruptcy lawyers are here to help. Give us a call to schedule a consultation today.

Stopping Foreclosure Action

Stopping Foreclosure Action

Can I save my house if the mortgage holder has started a foreclosure action?

As long as there has not been a foreclosure sale, even after foreclosure paperwork has been sent to you, the foreclosure action would be stopped with the filing of the bankruptcy case, and the mortgage default could be made up.  If you are able to formulate a plan that meets the tests below, and would provide for resuming the payments and making up the default, then a Chapter 13 filing would still save the house.

There are really four tests that are used by courts in deciding whether to confirm a Chapter 13 plan.  The Debtor needs favorable rulings on all of the following issues, and may have other criteria to consider:

  • Are the unsecured creditors getting as much over the life of the plan as they would have received if the Debtor had filed a Chapter 7 and non-exempt property was sold?
  • Does the plan pay all secured creditors in full, plus interest, to the extent of the value of collateral, and pay all past due support and taxes in full?
  • Does the monthly amount equal the amount available from all of the Debtor’s income after reasonable expenses, for at least three years?
  • Does the overall effect of the plan suggest the Debtor is acting in good faith?
  • The Debtors sometimes have to propose more than one plan in order to convince the trustee and the Court that the plan meets all of the criteria above.