Filing for Chapter 7 bankruptcy requires that you provide accurate information about your assets and your debts in order to qualify. This is because all debtors who receive Chapter 7 must pass a means test and other qualification procedures. A recent case illustrates the importance of filing accurate information. A debtor filed a voluntary petition in the beginning of January 2017 and acknowledged that his liabilities for primarily consumer debts.
The debtor’s annual income was beyond the median for the state of Illinois, causing that debtor to initiate a Chapter 7 means test calculation. He claimed allowable expenses and calculated his disposable income in a projected manner to be only $3,216 per month. The United States Trustee in that case, however, filed a motion to dismiss and asserted that even though he correctly calculated his income on the means test form, he claimed unavailable or improper deductions for some of his expenses.
The allowable standard for housing and health care expenses were both exceeded and the trustee, in that case, argued that if the deductions were disallowed, the debtor would be responsible for paying a significant amount to his unsecured creditors, meaning an abuse of Chapter 7 bankruptcy.
The debtor argued that his additional rent was because he had to be in a particular school district for his special needs child and he requested an evidentiary hearing to be scheduled to allow him to testify. If you have questions about the bankruptcy process and what you need to include on your paperwork, schedule a consultation with an experienced attorney immediately. Contact the Law Office of Joel R. Spivack at 856-861-6203 or by filling out our online contact form to get started today.
The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney/client relationship. If you are seeking legal advice, please contact our law firm directly.