When this question is asked, most people are talking about a St. Louis Chapter 7 bankruptcy. This type of bankruptcy petition results in a discharge of your unsecured debts (such as credit cards, medical bills, payday loans, old utility bills, etc.). But in order to get into a Chapter 7, you first have to pass the “Means Test”.
ATTORNEY FEES FOR A ST LOUIS CHAPTER 7 START AT $675
What is the Means Test? It is calculation that was devised by the US Congress in 2005 to determine whether or not you are above or below the median income level for your particular sized household. More specifically, the calculation/test looks at your total household income over the previous six (6) months before filing a bankruptcy. If, based on the total household income over the previous six months, you are below the median, then you qualify for a Missouri Chapter 7.
That’s the short answer. But as you have probably already guessed, the Means Test is actually a very complex and involved set of calculations that can easily result in mistakes (unless of course you are a trained attorney with several years of experience completing the test!!)
An interesting quirk about the Means Test (that not very many people know about) is the fact that there is a way to “pass” the test even if you are above the median income level. So for instance, let’s say you are a household of two (you and your spouse). According to the government, the average (or median) gross income for a household of two is: $52,783. But let’s also assume that your household gross income (between you and your spouse) is $55,000. This clearly shows that you would be above the median income level (and therefore do not qualify for a 7). However, there is still a way to get you into a St. Louis Chapter 7!!
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The government also allows you to take certain exemptions and deductions off of your household income. For example, if you gross 55K, you don’t actually bring home that much money. You end up netting something less because of deductions going towards taxes (or health insurance, or mandatory retirement contributions, or voluntary charitable donations). And you likely have some sort of monthly healthcare bill for your household (that is not covered by insurance). If you own a car or a house, there are deductions that can be taken on the Means Test which takes into consideration those types of expenses. And in the end, it might very well be possible to get you into a Chapter 7 bankruptcy even if you are clearly above the median income!!
But in order to accomplish this goal, you need to hire an experienced St. Louis bankruptcy attorney!! Our firm specializes in this type of law (with nearly 20 years of experience!!) We want to make sure all of your debt is discharged, all of your assets are protected, and that you fully understand how the entire process works (from start to finish).
We have two locations: in Central West End of St. Louis, at 1 North Taylor, St. Louis, MO 63108; and in the Twin Cities of Festus / Crystal City, at 1000 Truman Blvd (Highway 61/67), Jefferson County, MO 63019. The initial consultation is free. So contact us today to learn more!!