Elgin, IL Lawyer for the Illinois Bankruptcy Means Test

The Illinois Means Test is a crucial, and often confusing, first step in the bankruptcy process. It is a formal calculation required by federal law to determine whether an individual is financially eligible to file for Chapter 7 bankruptcy. Essentially, the test assesses if you have the “means” to repay a portion of your debts. An error or miscalculation on this complex form can lead to the dismissal of your case or force you into a different type of bankruptcy. At The Law Offices of Anthony R. Scifo, we provide expert legal guidance to clients in Elgin, ensuring the Means Test is prepared accurately to achieve the best possible outcome.

Navigating the specific income requirements and allowable expense deductions requires precision and a deep understanding of bankruptcy law. Our attorneys have years of experience handling these calculations, maximizing all legal deductions to help our clients qualify for the debt relief they need. To get a clear and accurate assessment of your eligibility, call our Elgin office at (847) 628-8311 for a free consultation.

The Two Parts of the Illinois Means Test

The Means Test is not a single calculation but a two-part analysis of your financial situation.

Part 1: The Median Income Test

The first step is a straightforward comparison. We calculate your household’s average gross monthly income over the six full months prior to filing. We then compare this figure to the current median income for a household of the same size in Illinois. These official figures are published and periodically updated by the U.S. Department of Justice.

• If your income is below the Illinois median, you automatically pass the Means Test and are eligible to file for Chapter 7 bankruptcy.
• If your income is above the Illinois median, you must proceed to the second, more complex part of the test.

Part 2: The Disposable Income Test

If your income is above the median, it doesn’t mean you automatically fail. It simply means we must perform a more detailed calculation to determine your “disposable income.” This involves subtracting specific, legally allowed monthly expenses from your income. These expenses include a mix of your actual costs (like mortgage, car payments, and taxes) and standardized living expenses determined by the IRS for your county. If your calculated disposable income over the next five years is below a certain legal threshold, you can still pass the test and qualify for Chapter 7.

Why an Experienced Attorney is Crucial for the Means Test

Attempting to complete the Means Test without legal guidance is a significant risk. The form is complex, and the rules are strict. An experienced bankruptcy lawyer provides critical advantages:

• Maximizing Deductions: We know every allowable deduction under state and national standards, ensuring your expenses are fully accounted for to present the most accurate picture of your disposable income.
• Avoiding Costly Errors: A simple mistake, such as miscalculating your income period or using the wrong expense standard, can lead to your case being dismissed or challenged by the bankruptcy trustee.
• Arguing Special Circumstances: If the six-month lookback period doesn’t reflect your current reality (for example, due to a recent job loss, pay cut, or medical crisis), we can file motions to rebut the test’s presumption and argue that special circumstances should allow you to qualify for Chapter 7.

What Happens if You Don’t Pass the Means Test?

Not passing the Means Test does not mean you are cut off from debt relief. It simply means the law presumes you have the ability to repay a portion of your debts over time. In this situation, you are typically eligible to file for Chapter 13 bankruptcy.

Chapter 13 is another powerful form of bankruptcy that stops creditor harassment, foreclosure, and repossession. It allows you to consolidate your debts into an affordable 3- to 5-year repayment plan. For many, Chapter 13 is actually a better tool, as it provides a way to catch up on missed mortgage or car payments and keep valuable assets. We can advise you if this is the right path for you.

Frequently Asked Questions About the Means Test

What income is included in the Means Test calculation?
The test looks at nearly all sources of income received in the six calendar months before you file. This includes wages, salary, bonuses, self-employment income, rental income, retirement income, and even regular financial contributions from family members or a non-filing spouse.

What if my income has recently gone down?
This is a “special circumstance.” Because the test looks backward, a recent job loss might not be reflected. An experienced attorney can present evidence of your new, lower income to the court and argue that the historical calculation is not an accurate reflection of your ability to pay.

Do I need to take the Means Test for Chapter 13?
Yes, but it serves a different purpose. In Chapter 13, the Means Test is used to determine how long your repayment plan must be (three or five years) and the minimum amount you must pay to your unsecured creditors during that plan.

Get an Accurate Means Test Analysis Today

Don’t let a complex form stand between you and the financial fresh start you deserve. The Law Offices of Anthony R. Scifo will provide the expert analysis and guidance you need to navigate the Illinois Means Test correctly and confidently.

Call our Elgin office at (847) 628-8311 for a free consultation and to find out if you qualify for Chapter 7 bankruptcy.