If you wish to file a Chapter 7 personal bankruptcy, you should attempt to pass the California means test. The test only applies to higher earnings filers which means that if your income is below the California typical for your household size you are exempt from the test and may file a Chapter 7.
If your earnings are higher than the California average, you will need to complete the means test to identify if you can pay back a portion of your unsecured financial obligations through a Chapter 13 personal bankruptcy.
Means Test Exemptions
If your debts are not primarily consumer financial obligations then you are exempt from the means test. You are also exempt from the means test if you are a disabled veteran and incurred your financial obligation mainly throughout active service or carrying out a homeland defense activity.
California Median Income
If your current regular monthly household income is less than the California median earnings for a household of your size there is an anticipation that you pass the methods test and are qualified to submit a Chapter 7 bankruptcy.
Your average family income is figured out by balancing your regular monthly earnings over the last 6 calendar months. If you are over the median income limitation and your earnings has decreased over the last 6 months, then waiting several months may bring your earnings under the average level for California. As soon as you determine your average regular monthly earnings you multiply that by 12 to determine your yearly earnings for the purpose of the California median earnings test.
1 Member Household- $47,798.00.
2 Member Household – $62,009.00.
3 Member Household – $66,618.00.
4 Member Household – $75,111.00.
5 Member Household – $83,211.00.
6 Member Household – $91,311.00.
7 Member Household – $99,411.00.
8 Member Household – $107,511.00.
9 Member Household – $115,611.00.
10 Member Household – $123,711.00.
This article was written by Alla Tenina. Alla is one of the best Bankruptcy Attorney in Sherman Oaks, and the founder of Tenina law. She has experience in bankruptcies, real estate planning, and complex tax matters. The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. This website contains links to other third-party websites. Such links are only for the convenience of the reader, user or browser; the ABA and its members do not recommend or endorse the contents of the third-party sites.