Written by Attorney Karra Kingston.
Updated August 17, 2020
Whether to seek bankruptcy relief is not an easy decision to make but when you find yourself in a hole that just keeps getting deeper and deeper, sometimes it’s the best option to help you start over. When you are considering filing a Chapter 7 bankruptcy in South Carolina, qualifying under the Chapter 7 Means Test is one of the first steps you should take. The Means Test became part of the bankruptcy laws in 2005 when Congress revised the federal Bankruptcy Code. Congress was concerned about people abusing the bankruptcy process - they believed that many of the people who were filing Chapter 7 cases made “too much money” and could afford to pay their debts. To deal with this dilemma, they created the Chapter 7 Means Test to make certain that Chapter 7 relief was available only to the people who truly needed it. You can pass the bankruptcy Means Test in South Carolina in one of two ways. If your current monthly income is less than the median income for a family of your size in South Carolina, then you are immediately qualified to file your South Carolina bankruptcy as a Chapter 7 case. If your current monthly income is higher, then you won’t qualify immediately, but don’t feel too bad because that means you’re making more than most people! Plus, a Chapter 7 is still possible by completing the second part of the Chapter 7 Means Test, where you can show a very detailed account of all your income and allowed expenses. If you can show that there is little or no disposable income left at the end of the month, you qualify for Chapter 7 relief in South Carolina.
South Carolina Median Income Levels
South Carolina Median Income Standards for Means Test for Cases Filed On or After May 1, 2021
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Discharge in Bankruptcy for South Carolina
Getting your discharge means that you have successfully reached the goal of your bankruptcy case. After you file a South Carolina bankruptcy there are several steps that you need to complete before the Court will grant you a discharge. The South Carolina bankruptcy discharge is a court order stating that most of your debts are eliminated, meaning that you don’t have to pay them and can move on to a fresh start. It’s important to remember that some debts, like child support, will survive a bankruptcy because they are non-dischargeable. Most people have debts that are unsecured like credit cards and medical bills, all of which can be eliminated by your South Carolina bankruptcy discharge. To get to this point you will need to file all your paperwork and attend your Meeting of Creditors with your bankruptcy Trustee. Getting a discharge is your primary goal, so it’s important to know that Courts can deny a discharge for many reasons such as fraud, concealing documents, lying, transferring property. Upsolve can help ensure that you get your discharge by walking you through all of these details, step by step. You should also note that your discharge is not the same as the case being closed. That usually happens a few weeks after your discharge is entered. If most of your debt is not dischargeable in a Chapter 7 bankruptcy, you may want to look at a Chapter 13 bankruptcy to eliminate these debts through a repayment plan.
South Carolina Means Test Calculator
If you pass the bankruptcy Means Test in South Carolina based only on your income, you can immediately file your South Carolina bankruptcy! If your current monthly income is higher than the median income, you will need to go through a full means test calculation. Don’t worry! There are many people in the same situation as you who are still able to qualify for a Chapter 7 bankruptcy despite seemingly having a high income! When calculating whether you qualify for a Chapter 7 bankruptcy, it’s very important to make sure that you are using the most up-to-date South Carolina Means Test Calculator. You can find many Means Test Calculators online that can help you. Unfortunately, it’s hard to know which calculators are regularly updated. Means Test figures constantly change and using an outdated calculator can be a recipe for disaster! If you use an outdated calculator you may think you qualify for a Chapter 7 when you really don’t, or worse, the other way around! If you file a Chapter 7 and don’t qualify, the Court can throw out your case or switch it to a Chapter 13. Luckily, Upsolve’s South Carolina Mean Test Calculator is current to the day for South Carolina and all other states. Upsolve can also help you through the rest of the process to complete all the necessary components of your South Carolina bankruptcy case and successfully receive your discharge.
What Happens if I Fail the Means Test for South Carolina?
If you fail the bankruptcy Means Test in South Carolina, there are several things you can check to see if it is still possible to qualify for a Chapter 7 bankruptcy. First, you could take a look at the Means Test calculation to make certain that you included all possible expenses. It can be easy to miss an expense if it’s something you only buy a couple of times per year. If you find enough allowed expenses like this, it could be enough to pass the Means Test. If you are still not able to pass the Chapter 7 Means Testafter double-checking all your expenses, it’s possible that you might qualify in the near future if something about your situation changes. For example, if you or your partner is pregnant or you are intending to have an elderly relative move in with you, then your family size is about to increase, which may change the outcome of your bankruptcy Means Test in South Carolina. If your work is seasonal, then your income is going to be at its highest at the end of your busy season. In that case, waiting a month or two may be all you need to pass the Chapter 7 Means Test. Alternatively, you may want to think about any expenses that you were planning to undertake in the future. For example, maybe your car is old, and you were planning to get a new one in the near future. Do you have term life insurance? Should you have term life insurance to protect your loved one? If none of this applies, then it may be time to consider a Chapter 13 bankruptcy instead as an alternative form of relief. If you don’t think you pass the Chapter 7 Means Test but can’t imagine how you’d ever make a Chapter 13 plan payment, you may want to contact a local bankruptcy attorney. A bankruptcy attorney can make sure you did your calculations correctly can help explain the process to you.