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The Bankruptcy Means Test for Mississippi Petitioners

If you’re considering filing for bankruptcy, it is important for you to learn about the different forms of personal bankruptcy. Whether or not you are able to file a bankruptcy petition under Chapter 7 may depend in part on whether you meet the means test, which we’ll describe below. Even if you do meet the income limits established to file under Chapter 7, you may still wish to obtain the benefits available to you by filing under Chapter 13. Discuss your options with an experienced Mississippi bankruptcy attorney to ensure that you are choosing the form of bankruptcy that will best suit your financial needs and goals.

In order to be eligible to file for bankruptcy under Chapter 7, you must meet the income and asset threshold as established under bankruptcy law. There are two ways to qualify: either through having a household income that falls below the median income for your state or by meeting the means test established by the bankruptcy court. According to US Census data, the average annual income for a Mississippi resident is $37,590. For a household of two, the average is $45,298, and for a household of four, it is $62,474. If your or your family’s income falls below these numbers, then you are eligible to file under Chapter 7.

Those with greater annual income who wish to qualify for a Chapter 7 bankruptcy need to complete the means test to see if they qualify. This test accounts for the amounts that the household spends on essential costs such as clothing and medical expenses, as well as payments made on certain secured debts such house and car notes.  Taxes, health insurance, mandatory retirement, and court ordered payments such as child support are also considered in the means test.

Choosing between filing a bankruptcy petition under Chapter 7 and Chapter 13 involves weighing the advantages and disadvantages to each. Chapter 13 requires petitioners to make monthly payments toward a consolidated total of their debts over a three to five year period. Chapter 13 is primarily used to help bring house and car notes up to date. When filing a petition under Chapter 7, unsecured debts are eliminated, but a Chapter 13 repays unsecured debt based on what the petitioner can afford as determined by the means test. A knowledgeable bankruptcy attorney can walk you through the advantages of each.

If you are considering filing for bankruptcy, contact the experienced and compassionate Mississippi bankruptcy lawyers at the Gardner Law Firm for a consultation, in Biloxi at 228-436-6555, Pascagoula at 228-762-6555, and Hattiesburg at 601-582-4300.

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