Written by Attorney Eva Bacevice.
Updated August 17, 2020
You may have heard that it is harder to file a Chapter 7 bankruptcy these days. The reason for that viewpoint is that Congress passed a revision to the federal bankruptcy laws back in 2005 to counteract suspected abuse, meaning there was concern that there were too many people filing Chapter 7 bankruptcies who could really afford to pay back some or all of their debts. As a response to this growing concern, Chapter 7 cases are now approached with a “presumption of abuse” that you have to overcome in order to file a case. The reality is that most people can still file a Chapter 7 case, but they all have to go through an extra qualification test called the Means Test prior to filing. In order to pass the bankruptcy Means Test in Florida, you can qualify in one of two ways - first, you can immediately qualify by showing that your income (current monthly income for all income coming into the household) is below the median income in Florida for your family size. The second way to pass the Means Test and qualify to file a Chapter 7 in Florida is to go through the full Means Test which will examine in depth your average monthly income and your regular monthly expenses to show that there is little to no disposable income left at the end of the month.
Florida Median Income Levels
Florida Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
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Discharge in Bankruptcy for Florida
When you file your Florida bankruptcy, the end goal that you have in sight is to receive your discharge order. The discharge order comes near the end of the case and that is the moment when most (if not all) of your debts are discharged, meaning that they are no longer your obligation to pay and that you can focus on your fresh start. There are some debts which are non-dischargeable, such as child support and student loans, so those will survive the bankruptcy process, but all of your unsecured debt (like credit cards and medical bills) will be behind you. Your Florida bankruptcy discharge should be entered approximately 60 days after your Meeting of Creditors hearing. You can set yourself on a straight path to discharge by partnering with Upsolve who can walk you through the process every step of the way.
Florida Means Test Calculator
In order to properly determine if you can qualify under the Means Test to file a Chapter 7 case, you will need to utilize a Florida Means Test calculator to show the necessary calculations. While you will be able to find many Means Test calculators available online, we highly recommend that you use Upsolve’s version as it is updated daily for Florida and all other states. This will have up-to-date information on what constitutes reasonable monthly expenses in a wide variety of categories to assist you in fully accounting for all of your monthly expenses. It is vital to use the most current information to set yourself up for the best chance of filing a successful Chapter 7 Florida bankruptcy, and there is no reason to risk your eligibility by using a resource which might be out of date. Further, Upsolve can also help you throughout the entire process to ensure that you complete all necessary paperwork and steps to get to your fresh start.
What Happens If I Fail The Means Test for Florida?
It is entirely possible that you will go through both the income limits and the full Means Test and not qualify to file a Chapter 7 case when filing your Florida bankruptcy. If that happens, we encourage you to explore a few different options before giving up on the Chapter 7 option. First, you should go through your full Means Test and make careful notes. Did you include expenses for all possible items? Some items might be inadvertently missed the first time, such as continuing contributions to the care of household or family members. If you are driving an elderly family member to doctor appointments, you can account for the gas, as well as office and prescription co-pays. Make certain that you are fully exploring all possible costs, like school supplies for dependent children under 18. If these are expenses that do not occur monthly but only happen a few times per year, average out the overall costs per month. Second, think about any expected changes that might be coming soon. Are you expecting a possible layoff? Are you or your partner pregnant? An additional dependent can make the difference between qualifying and not. Also, think about the nature of your work. Are you salaried and/or working regular hours? Or is your income mainly from seasonal employment? Maybe you work at Walt Disney World and the bulk of your income comes during the heavy tourist season. If that is the case, are you looking to file just after that season ends? If any of the above scenarios apply, you should look again at the Means Test after the change occurs to see if you will qualify at that point. If so, Upsolve can continue to help you through the process in Florida. If none of the above helps you pass the Means Test, then it is a good time to meet with an attorney and explore whether a Chapter 13 case may be an alternative solution for you.