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Miami Bankruptcy & Criminal Attorney / Blog / Bankruptcy / Chapter 7 Bankruptcy: Means Testing

Chapter 7 Bankruptcy: Means Testing


If you have been overwhelmed by debt in the state of Florida, you may be looking for a way out from under the pressure of debt collectors.  You’re not alone: nearly 27,000 Floridians filed for bankruptcy in 2022 alone.  One of the most common pathways out of debt is through a Chapter 7 bankruptcy filing. But not everyone qualifies.

The Means Test 

Florida law lays out the amount of average monthly income that can be made based on the number of people in a household. Annually, a single person could earn up to nearly $61,000, while a family of four has a limit of around $100,000. These numbers are based on the median incomes of Floridians, and they change regularly, so these are just ballpark figures.  If you earn more than the median, it’s possible you could still qualify for a Chapter 7 filing if you happen to have enough expenses that are deductible.

Calculating Your Income 

Obviously, the bulk of most people’s income comes from the paychecks received by themselves and their spouses.  Spousal income is part of the formula when filing jointly and not legally separated. All overtime and bonuses are included. For those in the gig economy, income listed on a 1099 form is part of the earnings package. Money earned from rental properties, dividends, and interest must be listed, as well as pensions or other retirement income. Those who own a business must include income from the business.  Some people are surprised to learn that money received from Unemployment, Worker’s Compensation, alimony, and child support are all considered income that must be included in determining your total income.

 Deductible Expenses 

For those with incomes that exceed the median limits, it may be possible to qualify for Chapter 7 after deducting certain expenses. That includes:

  • Income tax payments;
  • Child care payments;
  • Secured debt payments on a home or vehicle;
  • Spousal and/or child support payments;
  • Premiums for health and/or disability insurance;
  • Premiums for term life insurance;
  • Payments for required items like uniforms, union dues, and retirement contributions;
  • Charitable contributions up to a point.

Depending on the size of your household, you are allowed deductions related to clothing and food costs, transportation expenses, the cost of utilities, out-of-pocket medical expenses, and more.

The Legal Help You Deserve

The experienced Miami bankruptcy attorneys at The Law Office of Julia Kefalinos are dedicated to ensuring you make informed and palatable decisions related to your financial future.  To discuss your situation, contact our office today.

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