During World War II, United States bombers wreaked havoc on their enemies. Some of these bombers were able to carry 2000 pound bombs. Can you imagine witnessing the damage of one of these bombers in action?
In October 2005, our wonderful Congress decided to declare war on U.S. debtors after receiving 40 million dollars in campaign contributions! As a result, Congress decided to bomb all bankruptcy debtors with the Form B22 means test.
The purpose of the means test is to prevent bankruptcy debtors from eliminating unsecured debt if they earn more than an average family of their size.
As you can imagine, the bankruptcy means has caused a lot of anger in potential bankruptcy filers. The conversation usually goes something like this:
Bankruptcy Attorney: “You cannot file Chapter 7 because you make more money than the average family of your size.”
Potential Filer: “What are you talking about? We barely make ends meet. We would not be sitting in this office if it were otherwise.”
Bankruptcy Attorney: “I’m sorry, but Congress passed this law back in 2005. We are stuck with it.”
Potential Filer: “This cannot be. My friend down the street just filed Chapter 7, and he is free from all of his debt. Are you telling me that I am stuck with mine?”
Bankruptcy Attorney: “Yes.”
I hate it when the conversation goes like that. I like to make people happy but sometimes potential bankruptcy filers are not happy after their means test results.
Is there hope for some over-median families?
In some cases, the answer is yes. Debtors who have high daycare expenses can file Chapter 7 in some situations even when their income is over the median. Other helpful deductions are church tithes, alimony costs, child support costs, and term life insurance costs.
The bottom line is this – don’t be discouraged from meeting with a bankruptcy attorney just because you are a high earner. Let a professional bankruptcy attorney examine your situation to see if your potential case will work.
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