Written by Attorney Karra Kingston.
Updated August 1, 2019
If you are thinking about filing bankruptcy, Chapter 7 can be used to help you eliminate your debt in as little as 90 days and give you the fresh start you’re looking for. In 2005, Congress created a “Means Test” under the Bankruptcy Abuse Prevention and Consumer Protection Act to stop people from filing fraudulent bankruptcies. The Chapter 7 Means Test determines whether you qualify for Chapter 7 relief or whether it looks as though you have the means to pay your debts, triggering the “presumption of abuse.” Through Chapter 7 bankruptcy, the law allows certain debts to be wiped out so that you don’t have to pay your creditors back. Many people who fall into unfortunate circumstances need to use bankruptcy as a tool to help them get back on their feet. The Chapter 7 Means Test requires you to fall within certain income levels to qualify for Chapter 7 bankruptcy in Mississippi. If your income is considered too high, then you will have to go to the second part of the Means Test to see if you qualify. The second part of the Means Test considers your monthly expenses. You may be exempt from the Means Test if your debt is not primarily consumer debt. For example, if the majority of your debt was due to a failed business but your income is high you still may be able to qualify for a Chapter 7 bankruptcy and be exemptfrom the bankruptcy Means Test in Mississippi. If you’re not exempt, you must qualify under the bankruptcy Means Test in Mississippi to file for Chapter 7 bankruptcy relief.
Mississippi Median Income Levels
Mississippi Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
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Discharge in Bankruptcy for Mississippi
A Mississippi bankruptcy discharge is your goal when you file bankruptcy. The bankruptcy discharge is a one-page final order issued by the Mississippi Bankruptcy Court stating that you are no longer obligated to pay back your debts. Some debts can't be discharged. Common non-dischargeable debts include student loans, recent tax debt, child support, and alimony. A Mississippi bankruptcy usually takes 4 - 6 months. A discharge is not guaranteed and you must complete the required paperwork before filing. The Court can deny (or revoke) your discharge for many reasons mostly related to lying to the Court or your creditors or hiding assets. Once you get your Mississippi bankruptcy discharge, keep it in a safe place. After receiving your discharge, you can begin the process of rebuilding your credit.
Mississippi Means Test Calculator
There are many Means Test calculators available online. It’s important to make sure that whichever Mississippi Means Test Calculator you use, has the correct figures. Part of the the Mississippi Means Test Calculator determines whether your income is below Mississippi’s median income level. You will need all sources of income to make this determination. If you fall below the median income for a household of your size in Mississippi, then you have passed the Chapter 7 Means Test and are eligible for Chapter 7 bankruptcy relief. If your income is above the median income level in Mississippi, you will need to go to the second part of the Means Test which looks at your disposable income after deducting your reasonable monthly expenses. If you have no money left over after paying expenses, you may file your Mississippi bankruptcy as a Chapter 7. There are a number of online calculators that you can use, however many are outdated. Luckily Upsolve’s Means Test Calculators are always kept up to date, so you don’t have to worry! It’s important to use a calculator that is up to date because you may think you qualify for Chapter 7 relief when you don’t (or the other way around) otherwise.
What Happens If I Fail the Means Test for Mississippi?
If you still have money left over after going through the Chapter 7 Means Test, then you may first want to review the numbers to make sure you entered everything correctly. If you still don’t qualify, you may want to consider waiting to file your Chapter 7 case. Is your income going down in the near future? Will your family size grow? Are you getting divorced? Many of these circumstances will impact your income and your expenses on the bankruptcy Means Test in Mississippi, so it may be beneficial to wait and see, if you can. If you think you failed the Mississippi Means Test, you may also consider contacting a bankruptcy attorney. Most bankruptcy lawyers give free consultations that are great to take advantage of! They can go over your income and expenses to determine if you missed something or provide you with other debt relief options. If you don’t qualify for a Chapter 7, you may want to look into filing a Chapter 13 bankruptcy instead.