Written by Attorney Karra Kingston.
Updated September 3, 2020
If you are stressed about paying your monthly bills you may want to look into filing a Chapter 7 bankruptcy. Filing an Idaho bankruptcy can be a great way to put your bills in the past and start your life over. To file a Chapter 7, you need to pass the Chapter 7 Means Test. The Means Test was enacted in 2005 when Congress added a law to stop people from seeking Chapter 7 relief when they could afford to pay back their debts. The bankruptcy Means Test in Idaho presumes that low income individuals can’t pay back their debts and are not abusing the system. Only people who are under a certain income limit and truly need the relief of a Chapter 7 are able to file their Idaho bankruptcy as a Chapter 7. To pass the Chapter 7 Means Test , you must fall under the median income for a household of similar size in Idaho. If your monthly income, based on an average from the last 6 months, is less than the median income for your family size in Idaho, then you pass the Chapter 7 Means Test. However, if your income is above the median, you don’t automatically fail. Instead, you’ll move to the second part of the Chapter 7 Means Test where your monthly expenses will be deducted from your income. The Means Test requires debtors to use national and local standards for living expenses. If your income is high, your expenses must also be high (up to the allowed limits) to pass the bankruptcy Means Test in Idaho and qualify for Chapter 7 relief.
Idaho Median Income Levels
Idaho Median Income Standards for Means Test for Cases Filed On or After May 1, 2021
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Discharge in Bankruptcy for Idaho
A discharge is your ultimate goal when filing an Idaho bankruptcy. A discharge means that you are able to walk away from most of your unsecured debts and start over debt-free! This is why you want to ensure that your bankruptcy Means Test in Idaho provides you with the correct figures. If your Means Test calculation is wrong, you are not eligible to receive a discharge in your Chapter 7 case. Once your Idaho bankruptcy discharge is entered, your creditors must permanently stop all collection efforts. It’s important to keep in mind that there are some debts that are non-dischargeable and survive a bankruptcy, such as child support, tax debt, and alimony. If you owe a non-dischargeable debt, then you are still on the hook and must pay these debts back even after you receive your Idaho bankruptcy discharge. It’s important to note that even if you don’t qualify for a discharge in a Chapter 7 bankruptcy, you may still qualify if you file a Chapter 13 bankruptcy. In a Chapter 13 bankruptcy you can receive a “super discharge” because the scope of a discharge in a Chapter 13 bankruptcy is much broader and includes some debts that can’t be discharged in a Chapter 7 case. To get your discharge, it’s important that you file the correct paperwork and attend your Meeting of Creditors. A bankruptcy discharge can be denied if you don’t go to your creditors’ meeting or are dishonest in your bankruptcy forms, so it’s important that you follow each step carefully. If your discharge is denied, you will have to continue paying your creditors. Upsolve is a nonprofit that can help you obtain your Idaho bankruptcy discharge free of charge. Upsolve can help guide you through the steps so that you can file a bankruptcy without hiring an attorney.
Idaho Means Test Calculator
In order to qualify for a Chapter 7 bankruptcy, you must pass the Chapter 7 Means Test. To determine if you qualify under the bankruptcy Means Test in Idaho, you’ll need to have all income sources and monthly expenses on hand. If you have enough disposable income to pay back your bills then you will not qualify for a Chapter 7 bankruptcy. There are many online calculators that can be used to help you. It’s important to keep in mind that the Means Test numbers change occasionally. That’s why it’s very important to use an up-to-date Idaho Means Test calculator. Using the Means Test calculator is a quick way to determine if you qualify for Chapter 7 relief or not. Unfortunately, many Chapter 7 Means Test calculators that are available online are outdated and it can be difficult to figure out which calculators have been kept current. Luckily, Upsolve’s Idaho Means Test calculator is always kept up-to-date, so you know your calculations are accurate. Using a calculator that is not kept current is extremely important because otherwise you might not realize you’re eligible for a Chapter 7 case even though you are. If you are eligible, Upsolve can help guide you through your Idaho bankruptcy, from the Idaho means test calculator all the way to the entry of your discharge.
What Happens If I Fail The Means Test for Idaho?
If you fail the bankruptcy Means Test in Idaho, it’s worth taking a second look at your calculations to make sure that you didn’t leave anything out. It’s easy to forget some of your monthly expenses. It’s also important to remember that even an annual expense should be included, even though you may not think of it as a “regular” expense. Sometimes people forget to include their medical expenses, charitable contributions, or expenses incurred taking care of an elderly family member. If you still don’t qualify but are thinking of purchasing a vehicle in the near future to get to and from work you may want to purchase it now, before you file for bankruptcy. This is especially true if your credit is still good, as you can get in a more favorable loan or lease before filing your bankruptcy case. Reasonable monthly payments for a leased or financed vehicle may help you pass the Means Test as an additional monthly expense. Do you have term life insurance? Should you? If so, you may want to think about purchasing it as it can be used as an additional monthly expense. If none of these make sense, you may want to wait to file. The Means Test looks at your last six months of gross income and then takes the average. If your income will go down in the future, your average monthly income for the Chapter 7 Means Test will be less, and you may qualify then. Sometimes, even a new addition to your family, like a new baby, can help you pass the Chapter 7 Means Test because it will increase both your family size and the total allowed expenses. If you still don’t qualify, you may want to explore a Chapter 13 bankruptcy as an alternative form of Idaho bankruptcy relief. A local bankruptcy lawyer can help you. Many lawyers give free consultations which you should take advantage of. Lawyers can review your finances and expenses to make sure that you didn’t inadvertently miss anything in your Chapter 7 Means Test calculation. A lawyer can also help you to determine if a Chapter 13 is a better option for you, if you truly don’t qualify for Chapter 7 relief.