Written by Attorney Eva Bacevice.
Updated July 17, 2019
In order to file a Chapter 7 bankruptcy in Indiana, you first have to show that you are qualified to do so. This requirement comes from a change to the bankruptcy laws which took place in 2005. At that time, Congress expressed concern that too many people were filing for Chapter 7 when they could otherwise afford to pay back some, or all, of their debts. To counteract this “presumption of abuse,” the Chapter 7 Means Test was created. You can qualify to file a Chapter 7 bankruptcy in Indiana in one of two ways. First, you can immediately qualify if your current monthly income is lower than the median income in Indiana for your family size. If that is not the case, then you can still qualify by going through the full bankruptcy Means Test in Indiana which will examine both your income and your reasonable monthly expenses. If, after going through the full calculation you can show that you have little or no disposable income at the end of the month, you will qualify for a Chapter 7.
Indiana Median Income Levels
Indiana Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
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Discharge in Bankruptcy for Indiana
When you file a Chapter 7 bankruptcy, the outcome you are hoping for is to receive a discharge. Your Indiana bankruptcy discharge is what will absolve you from some (or all) of your debt. It is important to remember that there are some types of debt (like child support) that are non-dischargeable, but all of your unsecured debt (like credit cards and medical bills) will no longer be your responsibility, allowing you to get a fresh start. You can set yourself up in the best position to achieve your discharge by making certain that you have completed all the necessary paperwork and tasks for your Indiana bankruptcy, including attending your Meeting of Creditors. Partnering with Upsolve can help as we will walk you through the process, step by step.
Indiana Means Test Calculator
If you pass the bankruptcy means test in Indiana based on income limits, congratulations! You are all set to move forward. If you did not clear that initial threshold, the next step is to go through a full Means Test to try to qualify for a Chapter 7. In this calculation, it is very important to use to most current figures to have the best chance of qualifying. While you will be able to find many Means Test calculators online, it’s hard to know which, if any, are kept up to date and current. If you are partnering with Upsolve, you don’t need to have that worry for your Indiana Means Test calculator, as Upsolve keeps it current to the day for all states. This can make a big difference if your figures are very close. Upsolve can also help you with all other aspects of your Indiana bankruptcy to help you toward your fresh start.
What Happens If I Fail The Means Test for Indiana
If you are not able to qualify under the bankruptcy Means Test in Indiana there are a few steps that you can take to fully explore the Chapter 7 option. First, double-check your numbers. Are you certain you included all possible monthly expenses? Think about things that you buy during the year a couple of times (like school supplies for the kids) and average your spending monthly to include them. In some circumstances, you can also include expenses you incur taking care of others, so if you are driving an older relative to appointments, you may be able to account for expenses you incur as part of that. Once you are certain that you included all possible expenses, think about the immediate future. Are you expecting any major changes? Maybe you or your partner is expecting a baby, changing your family size. Or perhaps you are facing a possible layoff sometime soon. Maybe your work is seasonal, like landscaping. If so, think about when you are trying to qualify - if it is right after your busy season your income will appear much higher now than in a few months. If any of the above applies to you, then it may make sense to wait a few months and take the Chapter 7 Means Test again. If you are eligible for Chapter 7, Upsolve can help you with all aspects of your Indiana bankruptcy with this Indiana bankruptcy guide. If none of the above applies to you, it probably makes sense to have a consultation with a Chapter 13 bankruptcy lawyer and explore that option instead.