Written by Attorney Karra Kingston.
Updated August 17, 2020
In 2005, Congress reformed the bankruptcy system because it was concerned that people were filing Chapter 7 cases when they could afford to pay their bills. Congress created the Means Test as a way to allow people who really needed relief file a Maine bankruptcy under Chapter 7 of the Bankruptcy Code. There are two parts to the bankruptcy Means Test in Maine. First, you can qualify by showing that your current monthly income is less than the Maine median income for your family size. If you don’t qualify based on your income, there is still another option. The second way to pass the bankruptcy Means Test in Maine is to examine both your income and monthly expenses and see how much disposable income you have leftover. Remember, the first part of the bankruptcy Means Test in Maine only considers your gross income, before taxes and other deductions come out. If, after going through the analysis to account for your expenses, including payroll deductions, there is little or no disposable income, then you can go ahead and file your Maine bankruptcy as a Chapter 7 case. If you still don’t pass the Chapter 7 Means Test, then you may have to look into other forms of relief.
Maine Median Income Levels
Maine Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
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Discharge in Bankruptcy for Maine
Once you receive your Maine bankruptcy discharge, you can move forward with your “fresh start”. A discharge is the Court order that says you’re no longer responsible for paying your debts. This is why people file a Chapter 7 bankruptcy, to eliminate their debts, so consider it the primary goal in your Maine bankruptcy case. You should know that some debts, like child support, are non-dischargeable. Luckily, most unsecured debts like credit cards and medical bills are dischargeable. It’s important that you follow all of the necessary steps so that your case moves along smoothly. You must properly file all of your paperwork and complete all of the necessary steps in your Maine bankruptcy, so that you receive a discharge. The discharge notice should be issued approximately 60 days after your 341 hearing, also known as the Meeting of Creditors.
Maine Means Test Calculator
A Means Test calculator can help you determine if you qualify for a Chapter 7 bankruptcy. If you do a simple online search you will find many calculators you can use for free. You need to make sure you use a current Means Test calculator; it’s very important you use a calculator that is up- to-date. Means Test figures change often and many of these online calculators have been left outdated. It’s also important to note that each state and county uses its own figures so, it’s best to make sure you are using a Maine Means Test Calculator that lets you add, at minimum, the county you live in. Making sure that you have the most up-to-date information on what amounts you can claim for your monthly expenses is vital and will ultimately determine if you qualify under the Chapter 7 means Test. Upsolve’s mean test calculator for Maine is current to the day, so you can rest assured that you are using the most current information. Upsolve can also help guide you through the bankruptcy process to put you on the path to getting your discharge and a fresh start!
What Happens If I Fail The Means Test for Maine?
If you go through the full Means Test calculation and don’t qualify to file your Maine bankruptcy under Chapter 7, we recommend reviewing your calculations. Go through the full Chapter 7 Means Test calculation again to confirm you added all the reasonable monthly expenses possible. You can and should include allowed expenses even if you have them only once or twice per year. Also, take a second look at your monthly expenses to make sure you didn’t miss any categories - like childcare or ongoing contributions to the care of household or family members. Sometimes missing even one of these expenses could make the difference in qualifying. If you still don’t qualify after reviewing everything, then you may want to wait to file. Do you have any expected changes on the horizon? Are you or your partner pregnant? That will increase your family size for Chapter 7 Means Test purposes. Is there a possibility that you may be laid off? Or is your work seasonal? If so, the timing of your filing can be key. If it’s right after you’re laid off, your average monthly income will be based on the past 6 months of regular employment, but 2 months from now, that average will go down, showing that you don’t have as much income and possibly allowing you to pass the Chapter 7 Means Test. Upsolve can help qualify for your Maine bankruptcy. If none of these scenarios apply to you then a Chapter 13 bankruptcy may be an alternative. You can also speak with a bankruptcy lawyer to see if they have any suggestions for how you might be able to pass the Chapter 7 Means Test you or guide you in the right direction with respect to your options.