The Oklahoma Statement of Current Monthly Income and Means Test Calculation for Use in Chapter 7 — Post 2005 is a crucial document required during the bankruptcy process in the state of Oklahoma. This statement helps determine whether an individual or a business is eligible to file for Chapter 7 bankruptcy, which allows for the discharge of debts. The primary purpose of the Oklahoma Statement of Current Monthly Income and Means Test Calculation is to assess the individual's or business's ability to repay debts based on their current monthly income. This document aims to prevent abuse of the bankruptcy system by ensuring that only those truly in need of debt relief qualify for Chapter 7 bankruptcy. There are different types of Oklahoma Statements of Current Monthly Income and Means Test Calculation for Use in Chapter 7 — Post 2005, which include: 1. Individual Filing: This type of statement is intended for individuals filing for bankruptcy. It requires the individual to disclose their current monthly income, which includes income from all sources such as employment, business endeavors, rental properties, investments, and government benefits. 2. Business Filing: In the case of a business entity filing for bankruptcy, a different version of the Oklahoma Statement of Current Monthly Income and Means Test Calculation is used. This requires the business to disclose its income and expenses, including revenue generated, operational costs, and any financial assistance obtained. The Means Test Calculation is a crucial component of the Oklahoma Statement of Current Monthly Income. This calculation considers various factors, including the individual or business's income, family size, state median income, and allowed expenses. By analyzing these factors, the Means Test Calculation determines whether an individual or business's monthly income exceeds the threshold set for Chapter 7 bankruptcy eligibility. Overall, the Oklahoma Statement of Current Monthly Income and Means Test Calculation for Use in Chapter 7 — Post 2005 is a critical document in assessing an individual or business's eligibility for Chapter 7 bankruptcy in the state of Oklahoma. It ensures that those genuinely in need of debt relief can benefit from the bankruptcy process and helps maintain the integrity of the system.
Oklahoma Statement of Current Monthly Income and Means Test Calculation for Use in Chapter 7 - Post 2005
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The Chapter 7 means test determines whether allowing someone to discharge their debts would be an abuse of the bankruptcy system. If your gross income based on the six months before filing bankruptcy is below the median income for your state, you pass the means test.
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.
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.
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.
This formula takes a look at the amount of disposable income compared to the level of unsecured debt. If the debtor's disposable income, projected for a five-year period, is more than 25 percent of the total unsecured debt, the debtor will likely be denied a Chapter 7 filing.
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.