Written by Attorney Eva Bacevice.
Updated August 17, 2020
You may have heard that there was a significant bankruptcy reform back in 2005. The Bankruptcy Code was changed by Congress because there was a concern that too many people were filing for Chapter 7 bankruptcy who could otherwise afford to pay their bills. The main result of that change was that an extra step was introduced for debtors to show that they were qualified to file a Chapter 7 case.This so-called Chapter 7 Means Test can be applied in one of two ways - first if you can show that your total current family monthly income is less than the median income in Ohio for a family of that size, you are immediately qualified to file a Chapter 7 case. You can determine your “current monthly income” or “CMI” by taking all of your income for the past 6 months and averaging it to a monthly amount. If your currently monthly family income shows to be more than the Ohio median threshold you can then go through the full bankruptcy means test in Ohio, where you can compare certain reasonable monthly expenses against your income to see if there is disposable income remaining at the end of the month. Often times, once you complete this more detailed balance sheet, you can easily show that the money is not going as far as you need to be able to pay additional bills. Once you have shown that you are qualified by completing and passing the Chapter 7 Means Test (whether by income limits alone or the full Means Test) you are considered qualified to file your Ohio bankruptcy under Chapter 7 of the Bankruptcy Code.
Ohio Median Income Levels
Ohio Median Income Standards for Means Test for Cases Filed On or After May 1, 2021
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Discharge in Bankruptcy for Ohio
When you file a Chapter 7 case the result you are aiming toward is to receive a discharge in you Ohio bankruptcy case. The discharge is essentially the end of the case, when you are officially able to walk away from the debts listed in your paperwork. Keep in mind that some debts are non-dischargeable (such as child support) but the bulk of the bills that have been weighing you down will no longer be an issue. Your Ohio bankruptcy discharge will be granted approximately 60 days after your 341 meeting, after your trustee and creditors have reviewed all of your paperwork and had the opportunity to raise any objections. Generally speaking, once your Meeting of Creditors is concluded, you are just waiting out the clock.
Ohio Means Test Calculator
The income limit cutoffs are very specific for Ohio bankruptcy cases, so if you do not clear that threshold the next step is to go through a full Means Test. You can do this using a Means Test calculator to be certain you have the best chance of passing the Means Test. Unfortunately not all online Means Test calculators are updated as regularly as needed, so you might inadvertently be relying on old information. Upsolve provides a Means Test calculator that is kept current to the day for Ohio and all other states. This Ohio Means Test calculator will give you the best chance of passing the Chapter 7 Means Test by walking you through the reasonable expenses you can include to show that your money is already going as far as it can. Upsolve can also help with all other aspects of filing your Chapter 7 case in Ohio, from help with filling out the paperwork to what to expect at your 341 meeting .
What Happens If I Fail The Means Test for Ohio
If you fail the Chapter 7 Means Test there are a few different routes you can take to continue with your Ohio bankruptcy. First, if you did not qualify for a Chapter 7 because of your current monthly income and monthly expenses, it is worthwhile to look at both. Additionally, is anything going to change in the near future? Also think about the nature of your work - if you work in a seasonal business, such as plowing snow in Ohio, at what time of year are you trying to file? The Chapter 7 Means Test always looks back over the last 6 months, so if you just came off of your busy season, your income is going to look much higher than it will in a couple of months. For any of these listed scenarios you can wait until the expected change happens and then try again. To learn more about the process of filing bankruptcy in Ohio please see the Ohio Bankruptcy Guide. If no changes are on the horizon and you have confirmed all of your expenses, it is probably time to explore a Chapter 13 case instead with a local bankruptcy attorney.