The Kentucky Statement of Current Monthly Income and Means Test Calculation for Use in Chapter 7 — Post 2005 is a vital document used in bankruptcy cases in the state of Kentucky. This form helps determine an individual's eligibility for filing Chapter 7 bankruptcy by assessing their current monthly income and comparing it to the allowed median income for their household size. Here is a breakdown of the components of this important document: 1. Current Monthly Income Calculation: The Kentucky Statement of Current Monthly Income evaluates an individual's average income over the six-month period leading up to their bankruptcy filing date. This figure includes all sources of income, such as salary, wages, tips, bonuses, rental income, self-employment earnings, and any other regular payments. 2. Means Test Calculation: The means test is an essential part of the Kentucky Statement of Current Monthly Income. It determines whether an individual's income exceeds a specified threshold, making them eligible for Chapter 7 bankruptcy. The means test considers various factors, including household size, secured and unsecured debts, allowable deductions, and specific expenses. By comparing the individual's income to the median income for a similar household in Kentucky, the means test establishes whether there is a presumption of abuse in filing for Chapter 7 bankruptcy. 3. Presumption of Abuse: If an individual's income exceeds the median income for a household of the same size in Kentucky, they face a presumption of abuse under the bankruptcy laws. This presumption implies that they may have enough disposable income to repay a portion of their debts through a Chapter 13 bankruptcy repayment plan instead of a complete discharge in a Chapter 7 case. However, this presumption can be rebutted by demonstrating certain exceptional circumstances or allowable expense deductions. Different types of the Kentucky Statement of Current Monthly Income and Means Test Calculation for Use in Chapter 7 — Post 2005 may exist based on updated laws or jurisdiction-specific requirements. However, the general purpose and structure of the document remain consistent across variations. It is crucial for individuals considering Chapter 7 bankruptcy to gather accurate information and consult an experienced bankruptcy attorney to ensure compliance with specific forms and requirements in their jurisdiction.
Kentucky Statement of Current Monthly Income and Means Test Calculation for Use in Chapter 7 - Post 2005
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How to fill out Kentucky Statement Of Current Monthly Income And Means Test Calculation For Use In Chapter 7 - Post 2005?
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FAQ
The U.S. bankruptcy code doesn't specify a minimum dollar amount someone must owe to make them eligible for a qualified filing. In short, any debt is enough debt. More important than the size of your debt is the size of your income. How much money you earn affects whether you qualify for Chapter 7.
Domestic support obligations, such as alimony or child support, and other court-ordered payments, including arrearage balances, can be deducted on the means test. The larger the arrearage balance, the more significant the benefit. Child care.
It does this by deducting specific monthly expenses from your "current monthly income" (your average income over the six calendar months before you file for bankruptcy) to arrive at your monthly "disposable income." The higher your disposable income, the more likely you won't be allowed to use Chapter 7 bankruptcy.
The means test is calculated by comparing the debtor's average income for the past six months (current monthly income), annualized, to the median income for households of the same size in the debtor's state of residence.
To calculate your six-month average gross income, you first need to add up your wages, salaries, and tips for the past six months. Then, divide that number by six to get your average monthly income. If you receive any income from sources other than employment, you'll need to factor that in as well.
If a filer qualifies for an exception to the means test, they will file Form 122A-1Supp. You can earn a high income and still pass the means test if you have substantial expenses like a hefty mortgage, multiple car payments, taxes, childcare, health care, or care of an elderly or disabled person.
The first considers whether the filer's income is below the Chapter 7 income limit, which is the median in the state where the petition is filed. If income is less than the median for the prior six months and there is no reason to assume it will soon increase, the test is passed, and the Chapter 7 filing can proceed.
Form 122A-1: Chapter 7 Statement of Your Current Monthly Income. Form 122A-1 focuses on your marital and filing status, as well as your monthly income as compared to your state's median income.