What Qualifies as Disposable Income?
The “means test” is a set of qualifications that determine whether a person is eligible for Chapter 7 bankruptcy. One of the key financial figures examined by the means test is a person’s disposable income. If an individual’s disposable income amount surpasses a certain level, he or she may not qualify for Chapter 7 bankruptcy but may instead file for Chapter 13 bankruptcy.
If you are feeling trapped by an overwhelming amount of debt, a Cedar Rapids Chapter 13 bankruptcy lawyer of Hong Law, PLC can help you break free by filing for bankruptcy. Chapter 13 bankruptcy can take a few years to complete, but at the end of it, your debts can be completely resolved. Contact our experienced bankruptcy lawyers at (319) 294-5853 to learn more about how we can serve you.
Calculating Disposable Income
Your disposable income is the money you have remaining each month after all of your necessary expenditures are accounted for. Some items that count as “necessary expenditures” include:
- Housing costs
- Transportation costs
All income that does not go towards these and other necessities is considered your disposable income. For those going through Chapter 13 bankruptcy, this money is used to pay back the debts you owe. On the other hand, those with a very small amount of disposable income may qualify for Chapter 7 bankruptcy.
If you feel as if your debts have gotten out of control, the Cedar Rapids bankruptcy lawyers of Hong Law, PLC can help you regain financial stability. Contact our knowledgeable bankruptcy attorneys at (319) 294-5853 for a confidential case evaluation.
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