What Are High Allowable Expenses?

If an individual is above the state median income, the remainder of the means test is applied. These aspects deal with primary expenses, and personal taxes on income are deductions on the means test. Involuntary deductions for mandatory retirement plans are viable, but voluntary retirement plan deductions are not allowed. There are standard allowances for health, disability, or term insurance. On houses, cars, and other secured debt payments, they are analyzed in terms of whether that debt will be an expense over the entire 60 months, and if you have an obligation that will be beyond the 60 months, you can use the actual amount that you pay.

If individuals have alimony or domestic support obligations, those expenses can be significant debt obligations and also material change. The calculation of the means test, childcare expenses can be significant and affect the means test calculations. Out-of-pocket healthcare expenses above the national standard can also be considered and are separately listed in the means test. Care of an elderly or chronically ill individual in your home who has a disability is also considered. If legitimate, this laundry list of expenses can result in situations in which individuals who earn considerably more than the means test allows may still qualify for a chapter 7. Suppose they don’t qualify for chapter 7. In that case, the expenses that I’ve just described could result in the projected disposable income calculation in a chapter 13 plan of a much lower reduced payment to creditors over the five years.

I Own Multiple Businesses And Might Need To File A Bankruptcy With One Of Them. How Could This Impact The Other Businesses?

Any individual owns several businesses and only files bankruptcy for one of those businesses. There shouldn’t be any impact upon the other businesses unless, in a loan application or representation to creditors, the individual has been approved for credit or a secured loan where that creditor can collect from more than one obligor. For instance, there may be cross-guarantees executed by the different entities. If the business’s financial affairs are kept entirely separate, there aren’t any intercompany transfers, and all corporate and LLC formalities are observed. In that case, one business that has been run and maintained entirely separately should not affect the other entities.

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