Bankruptcy Means Test: Why It Matters?

11 November 2020

Bankruptcy means a test is done to determine who can file for chapter 7 bankruptcy. The means test considers everything while determining your current position to pay your debt to the creditors. It goes through your income, expenditure, assets, and family members.

The means test was designed to reduce the number of debtors willing to get their debts erased. It has been seen that most of the debtors who have applied for the means test have passed.

Those people who cannot qualify for chapter 7 or want to keep their assets to themselves can apply for chapter 13 bankruptcy.

How Chapter 7 Bankruptcy Works?

Applying for chapter 7 can be an expensive and lengthy process. The means test helps the government clarify who is eligible for chapter 7. The Means Test has two parts. Both parts are designed to see through your income and assets and determine the current financial standing.

You have to apply for the Means Test only for the primary consumer debts like medical debt or credit card debts. You do not have to apply for this test if your debt is related to business loans.

First Part

The part of the Means Test determines whether your house income is below the state’s median income. The means test starts gathering information about your income, expenses, and assets. These data are mostly collected from the past six months. However, there have been cases where this six months time duration can be changed.

After all the reports, if it is being found out that your income is below the median income, you will qualify the Means Test. In a report made by the US government in 2013, more than 12% of the debtors were able to qualify the Means test in the first stage.

Second Part

The second part consists of going through all your expenses. These expenses consist of everything you pay for, starting from paying your utility bills, grocery bills to the travel expenses and education expenses. Out of all the expenses, only the allowable expenses are considered to be used by you. Other expenses that are not necessary are used to pay off your debts.

While you document the list of expenses, be thorough about the things you add to the list. Remember, those expenses will decide whether your petition will be accepted or not.

Allowable expenses are based on the local and national standards used by the IRS. The national list covers items like food and clothing, and local items cover housing expenses and car payments. You need to work carefully to ensure that all your expenses are thoroughly documented.

What’s Next After You Qualify for the Means Test?

Passing the means test means you have the green light to apply a petition for chapter 7 bankruptcy. Once your petition is accepted, most of the unsecured debts will be forgiven. That does not mean that this will be the best route for you.

There are also chapter 13 bankruptcy that might give more advantage over chapter 7 in many cases. Chapter 13 will help you put a hold on all your debts, mortgages, overdue loans, and bank taxes.

What Will Happen After You Fail The Test?

Once you fail the Means Test, there are no more appeals for a certain period. You can apply for the chapter, or you can wait for the cooldown time to apply again for the means test.

We have already mentioned that the Means Test goes through all your financial income and expenditure in the last six months. That means, after a failed attempt at the Means Test, you can apply again after six months.

However, if you do not intend to apply for the Means Test again in the future, you will be restricted to chapter 13 and will have to pay off your debt based on the chapter 13 provision.

The Bottom Line

Is it really hard to apply for a loan after bankruptcy? Well, you can say more than hard; it is more complex. You first need to qualify the Means Test, and then only you can apply for chapter 7. It is better to have an attorney while you are managing legal documentation.

Read Also:

Content Rally

Content Rally wrapped around an online publication where you can publish your own intellectuals. It is a publishing platform designed to make great stories by content creators. This is your era, your place to be online. So come forward share your views, thoughts and ideas via Content Rally.

View all posts

8 Reasons to Have a Pre-employment Background Check in Facility

It is risky to entrust your business to a total stranger who is seeking a job in your organization. For your business or organization to reap maximum benefits, it is important to make sure that you have a team of employees who you can trust. You don’t have to entirely depend on contract terms as the primary basis for the trust! Make sure that you have background knowledge of the employees before even employing them. 8 Reasons to Have a Pre-employment Background Check in Facility The following are the reasons why you need to have a pre-employment background check facility in your organization. 1. Keep away from criminals: Having criminals in your organization is very risky. They can steal from you, tarnish the name of your organization or cause scandals which can even lead to permanent closure. To make sure that you are not employing criminals, it is important to have a background check before hiring any employee. It is vital to make the job seeker to provide the relevant criminal records or what is commonly referred to as “Certificate of Good Conduct”. By doing this, you will be sure that you are not employing a convict and your organization is safe. 2. Scrutinize documents for authenticity: Some of the people seeking jobs may forge documents to make their resumes look impressive. If the employer is not keen, underqualified staff may be hired! Having underperforming staff has detrimental effects on the organization’s profits and operations. It is important to make sure that the documents provided by the prospective employees are authentic and verifiable. You can call the particular institutions indicated to verify the information. In this modern age, it is possible for a high school drop-out to possess a degree! Go through the paperwork to ensure that every detail provided is correct and true. 3. To ensure the proper social conduct: Many companies or organizations spend a lot of money to brand their image. It is very important that the image is upheld to the highest standards to make sure that it remains trustworthy in the eyes of investors and the public. To safeguard the organization’s image, it is necessary to have a background check of the employees to ensure that their social conduct doesn’t compromise what the organization stands for. You can go through their social media accounts and see what they post. If you find that a particular employment seeker has consistent ideologies that compromise the organization’s image, drop him/her. 4. To employ sober people: Most organizations today carry out pre-employment drug tests. The organizations require sober and productive employees, not drug addicts! Drug users normally underperform their duties and cause many workplace accidents. The accidents not only result in physical harm but also huge losses which become difficult to recover from. Furthermore, the insurance cost increases due to such accidents. Your business or organization does not have to go through such risks if you are able to avoid them. Have the employment seekers to take a drug test for the illegal drugs. You can employ a urine drug test, blood test, hair follicle or even a saliva drug test. 5. To ensure physical and medical fitness: Most jobs require the physical and medical fitness for maximum productivity. Certain medical conditions can only be worsened by the type of work being done. Example, a construction company may avoid people with respiratory conditions like asthma. It is important to ask for a medical report for particular tests to ensure that the employees are fully fit to carry out different tasks without taking medical leaves. 6. To check past employment records and reasons for being laid off: Research has shown that a person’s behavioral character is likely to remain the same under similar authority or conditions. Before offering employment, make sure that you have checked the employment records of the job seeker. You can do so by going through the recommendation letters provided or calling the organizations indicated. You don’t need to employ a person who was fired for coming to work late, stealing or even insubordination. There is a likelihood for your organization to suffer from the same! 7. To make sure that the employee is legally eligible to work in the country: It is against the law to hire illegal immigrants or underage people. To make sure that none of these happen, make sure that you have a proper pre-employment background test facility in your organization. For non-citizens, ask for work visas and all the legal documents. Make sure that you ask for the national identity cards for the citizens. You don’t want your organization to be on the wrong side of the law! 8. To ensure a high level of responsibility: A job seeker might possess the sufficient education and skills for the job but is irresponsible when it comes to filing taxes (tax-noncompliance) or repaying loans. It might seem to be a non-issue until the same predicaments hit your organization. In your background check facility, make sure you inquire about tax certificates and loan statements. You need to employ people who show some degree of responsibility even in the small matters! It is always better to be safe than sorry. Make sure that you have a fully functional pre-employment background test facility in your organization! Read Also: Go For A Better Legal Job In 2018! Things To Look Out For While Hiring Health App Developers

Understanding New Hampshire Paycheck Deductions: What’s Coming Out Of Your Salary?

When you receive your paycheck, you might be puzzled by the various deductions taken from your hard-earned money. Understanding these paycheck deductions is essential to grasping what's happening with your salary. In this article, we'll break down the different components that make up your paycheck, helping you comprehend the deductions that impact your take-home pay. What are Paycheck Deductions? Paycheck deductions refer to the various amounts subtracted from your gross salary before you receive your net pay. These deductions serve various purposes, from funding government programs to securing your future. Let's delve into the most common types of paycheck deductions you might encounter in New Hampshire. Federal Tax One of the significant deductions is federal income tax. The federal government collects a portion of your annual income to fund public services such as defense, education, and healthcare. The exact amount deducted depends on your income level and the tax bracket you fall into. State Income Tax In New Hampshire, you'll also encounter state income tax deductions. This tax revenue is essential for funding state-specific programs and services. The rate at which your income is taxed can vary depending on your earnings and filing status. FICA Taxes FICA, which stands for Federal Insurance Contributions Act, includes two main components: Social Security as well as Medicare taxes. These deductions go toward funding your future retirement benefits and healthcare. Medicare Tax Medicare tax, a subset of FICA, is essential for financing healthcare benefits for seniors. Understanding this deduction is crucial, as it ensures that you'll have access to healthcare services when you retire. Social Security Tax Social Security deductions contribute to your future retirement benefits. These funds are crucial for maintaining financial stability during your retirement years. Health Insurance Premiums If you want to enroll, your health insurance payments will be withdrawn from your paycheck to cover your medical bills. Many employers include health insurance as part of their benefits package. Retirement Contributions If you're part of a retirement savings plan, such as a 401(k) or 403(b), your contributions are deducted from your paycheck. These deductions are instrumental in securing your financial future. Other Deductions Apart from taxes and retirement contributions, there might be other miscellaneous deductions. Therefore, these can include union dues, required licenses, or other mandatory payments. Voluntary Deductions Some deductions are voluntary, like contributions to charitable organizations or additional retirement savings. Furthermore, you have the option to choose whether or not to participate in these deductions. Deductions for Garnishments If you owe child support or have other court-ordered payments, your paycheck may be subject to garnishments. These deductions are non-negotiable and go directly to the designated recipients. Related: Tax Implications For Independent Event Planners The Impact of Deductions Understanding paycheck deductions is crucial, as they directly impact your take-home pay. The more deductions you have, the less money you'll receive in your paycheck. It's essential to be aware of the deductions specific to your financial situation. How to Measure Your Net Pay In order to depict your net pay, reduce all the deductions calculated from your gross income. Your net pay is what you ultimately take home. Being aware of this amount helps you budget and plan for your expenses effectively. When navigating the complexities of paycheck deductions, using a New Hampshire paycheck calculator can be a valuable tool to help you estimate your net pay accurately. Conclusion In conclusion, comprehending paycheck deductions is vital for financial literacy. It allows you to make informed decisions about your finances and plan for your future. Whether it's federal and state taxes, retirement contributions, or voluntary deductions, knowing what's coming out of your salary ensures you're in control of your financial well-being. Frequently Asked Questions Are paycheck deductions the same for everyone? Paycheck deductions can vary on the basis of your income, location, and individual circumstances. Not everyone will have the same deductions. Can I change my voluntary deductions? Yes, in most cases, you can adjust your voluntary deductions, such as contributions to retirement plans or charitable organizations, by contacting your employer's HR department. What occurs if my taxes are not paid on time? Failing to pay your taxes on time can lead to penalties and interest charges. It's essential to meet tax deadlines to avoid these additional costs. Do all states have a state income tax? No, not all states have a state income tax. Some states, like Texas and Florida, do not impose a state income tax on their residents. How can I reduce the impact of deductions on my paycheck? You can reduce the impact of deductions by carefully reviewing your financial situation and making informed decisions about voluntary deductions and tax planning. Consulting a tax professional can also be helpful in this regard. Read Also: Glenn Sandler (CPA) of G.I. Tax Service: What to Do If You Can’t Pay Your Taxes Delays In Tax Return Processing: Common Reasons And How To Resolve Them 5 Examples Of Passive Income You Need To Learn Now

5 Easy Ways To Make Extra Rent Money

Times are tough. With inflation and the cost of groceries on the rise, many Americans are feeling deflated when a quick trip to the grocery store for a few basic items can cost upwards of $75. With the cost of goods, utilities, and services on the rise, this puts many people in the increasingly difficult position of struggling to make ends meet with non-negotiable expenses. People need a place to live, and your monthly rent expense is arguably the most important debit coming out of your account. However, more and more people are finding the rising cost of rent impossible to keep up with. According to the U.S. Bureau of Labor Statistics, in recent years, the cost of rent has accelerated for both new tenants and returning tenants. Furthermore, new data from the Census Bureau found that more than half of all renter households have reported struggling to make ends meet and pay their monthly rent. If you feel like you can’t handle your rent or even groceries, you are not alone. Many people are in your shoes and are likely searching for easy ways to make extra rent money. If you need a simple way to pad your wallet, keep reading for some tips and tricks that can help to give you some breathing room with your rent. Utilize Your Space One way to earn extra rent money is to get smart with the space that you already have! Simply stated, housing costs are more affordable when they are split in half. If you have an extra room, consider advertising your spare room on a roommate search site like Roomster or RoomMatch. You can set your preferences and requirements when searching for a roommate, such as age, gender, life habits, and other personal preferences. Both sites have a background check option, where you can ask a person you are considering moving in with to complete a basic background check. Remember to keep safety in mind, and make sure you meet up with any potential roommates in a public space. It is also wise to never send any money electronically without first seeing a property in person. Rent Out Storage As the saying goes, one man’s trash is another man’s treasure. If you are uncomfortable taking on an additional person in your living space, perhaps you would feel more comfortable taking on some inanimate objects. If you have a garage, attic, or other space where you can safely store belongings, many people will pay for a safe and secure place to store their extra belongings. Rent Your Parking Space If you have a parking space included in your rental, this is something else you can capitalize on! Your rental spot could mean extra cash in your pocket! This is an option to consider if you are in a situation where either you do not have a car, or you work remotely and don’t drive often. Platforms such as SpotHero allow you to list your parking spot for rent. Rental options include short-term rentals for an event or a weekend or even long-term rentals. Just make sure you check your lease and make sure no language in your rental agreement prohibits this! Become A Driver If you do indeed use your car often and enjoy driving - you could make money on your daily commute! By driving for Uber or Lyft, you can earn extra cash and design a flexible work schedule that meets your personal preferences. If driving people is not your style, platforms such as Uber Eats or DoorDash are always in need of drivers, and you don’t need to make small talk with takeout! Remote Work Let your skills or creativity unlock extra cash! Are you a talented artist, writer, or graphic designer? Take advantage of this skill set! Advertise your work on a platform such as Etsy or eBay. Personalized gifts are trending - especially around the holiday season - and people will pay to have you create personalized items or designs! If creativity is not your strong suit - consider online or remote work. Companies will often hire workers for tasks such as data entry or freelance writing. With these types of jobs, you can create your own work schedule and work from the comfort of your own home! If you are looking for ways to make extra rent money, there are options available to you that require minimal disruption to your life! As the cost of living continues to skyrocket, these savvy tips can help you earn extra income to put towards your rent and provide you with a safety net of cash. If you’re still coming up short after following these tips, or these aren’t good options for you, contact LoanMart to learn about short-term options to get you through. Personal finance skills can only get you so far with the rising costs of living in recent years, so keep your options open. Read Also: Smart Ways to Invest in Gold How To Start Your Investor Journey: 5 Credible Options To Explore What Investors Should Know about Investment in Gold and Silver Assets

Bankruptcy Means Test: Why It Matters?

How Chapter 7 Bankruptcy Works?

First Part

Second Part

What’s Next After You Qualify for the Means Test?

What Will Happen After You Fail The Test?

The Bottom Line

A Detailed Guide to Cashless Car Insurance Policy

Amazing Ways to Maximize Your Profit at Trading (As a Beginner on Edge!)

Content Rally

Content Rally wrapped around an online publication where you can publish your own intellectuals. It is a publishing platform designed to make great stories by content creators. This is your era, your place to be online. So come forward share your views, thoughts and ideas via Content Rally.

Leave a Reply

Popular

Technologies For Creating A Startup Idea

How to Download Facebook Videos on Android?

7 Rules of Effective Ecommerce Web Design

The 10 WordPress Plugins Every Sucessful Blogger Uses

Follow Us

Recent

Small Daily Habits That Make Anxiety Worse Without You Knowing

Choosing the Right Dallas Roofing Contractor for Your Home Renovation Needs

Step-By-Step Guide To Community Clean-Up

How Huawei’s WisePlay DRM Is Redefining Content Protection for the Streaming Era

Related

8 Reasons to Have a Pre-employment Background Check in Facility

Understanding New Hampshire Paycheck Deductions: What’s Coming Out Of Your Salary?

5 Easy Ways To Make Extra Rent Money

Bankruptcy Means Test: Why It Matters?

How Chapter 7 Bankruptcy Works?

First Part

Second Part

What’s Next After You Qualify for the Means Test?

What Will Happen After You Fail The Test?

The Bottom Line

Share this Article

A Detailed Guide to Cashless Car Insurance Policy

Amazing Ways to Maximize Your Profit at Trading (As a Beginner on Edge!)

Content Rally wrapped around an online publication where you can publish your own intellectuals. It is a publishing platform designed to make great stories by content creators. This is your era, your place to be online. So come forward share your views, thoughts and ideas via Content Rally.

Leave a Reply

Popular

Follow Us

Recent

Related