I wish that I could tell you that the bankruptcy means test is logical, makes sense mathematically, and ends with a just result. However, the truth is that the bankruptcy means is not a product of logic. Its a product of politics that was created by Congress. As a consequence, sometimes the end result makes absolutely no sense.
Nasty Example of the Bankruptcy Means Test
It is possible for a high income debtor who has no income left over at the end of the month to be disqualified from filing a Chapter 7 or required to to make a Chapter 13 payment that has no connection with reality (a payment that is way to high to ever actually make) because of the means test.
However, there is a secret Georgia law that may help some consumers who get caught in the cross hairs of the means test. Believe or not, Georgia law requires parents to financially support children who are paupers. Children are also required to financially support their parents who are paupers.
“What!!!!” you may be thinking.
You thought you got rid of that person and that they are out of your life. The truth is that if that parent or child falls on hard times, you may be required to support them.
The Secret Georgia Law
The father, mother, or child of any pauper contemplated by Code Section 36-12-2, if sufficiently able, shall support the pauper. Any county having provided for such pauper upon the failure of such relatives to do so may bring an action against such relatives of full age and recover for the provisions so furnished. The certificate of the judge of the probate court that the person was poor and was unable to sustain himself and that he was maintained at the expense of the county shall be presumptive evidence of such maintenance and the costs thereof.
I believe that because of this law, a bankruptcy debtor can deduct any amount of money that they spend supporting a child or parent from the means test. Any consumer that wants to make the deduction must be able to document every single expense. For example, if you are paying for the medicine of your relative, you must have receipts. If you are paying their rent, we need a canceled check showing that the money went from your bank account to their landlord.
If you have questions about how the means test would affect your bankruptcy options, I would be happy to sit down with you for a free consultation and review your entire situation.