Indiana Bankruptcy Means Test Calculator: Estimate Qualification and Cost

Chapter 7 Means Test Explanation

There are a few things you need to keep in mind about the means test before filing:

1. First, the means test applies to your household income in Indiana, even if your spouse isn't filing with you. However, there might be some exceptions if you're legally separated.
2. When it comes to the means test in Indiana, they will look at how your average household income may compare to other households in the state. They use data from the Census Bureau.
3. You can check out the specific language used for calculating the average monthly income for the Indiana bankruptcy means test. It's all explained in this document right here. You may need to fill in the average monthly income you received from all sources during the six months following your bankruptcy filing. If your income varied during that time, divide the total for all six months by six.
4. If your income fluctuated during the year, you might want to check out an average income calculator. It's designed to help you estimate your average monthly income for the Indiana means test.

Now that we've covered the basics let's dive into the bankruptcy means test calculation for cases filed in Indiana in 2024.

Indiana Chapter 7 Bankruptcy Income Limit

You may wonder how the Indiana Chapter 7 bankruptcy income limit is calculated. These figures are specifically for cases filed on or after April 1, 2024. It's worth noting that these numbers tend to change every six months or so, so keep that in mind. If you're wondering about the annual income thresholds for different household sizes, take a look at the table below:

If your household size exceeds 9, you can add $9,900 for each additional family member. Remember, these figures change often, so remember that you can use the Chapter 7 Indiana Means Test Calculator to estimate with the most up-to-date figures.

What Is Considered Income?

Not all income is taken into account when filing for bankruptcy. For instance, disability and social security income are usually not included in the test. Other exceptions include payments for war crime victims and those related to a national emergency.

You may be wondering about the income types included in the Indiana bankruptcy means test. The test considers any regular payments made by someone other than the debtor to cover household expenses. Here are some examples of income (but not all) that are included:

1. Salaried income
2. Spousal income: If you're in a joint case or not legally separated, your spouse's income may count, too.
3. Hourly and overtime income
4. 1099 Income: If you're an independent contractor, the money you make from those jobs may count
5. Net Rental Income
6. Indiana government income
7. Child support and Alimony
8. Dividend, Interest, and Royalties
9. Pension and Retirement Income
10. Net business income
11. Annuity payments
12. Unemployment compensation
13. Worker's Compensation Benefits

Now, let's move on to calculating household size. It's an essential factor, so let's break it down.

What Is Considered In Household Size?

So, you may be wondering how they figure out the size of your household. When determining household size, things can get a little tricky. For example, your roommate might not be considered part of your household, but your kids, whom you claim as dependents on your taxes, usually are.

If you have kids who are away at college or if you're engaged but not yet married, different bankruptcy jurisdictions in Indiana might have their own rules about who can be counted as part of your household. Make sure you mention these exceptional circumstances to your bankruptcy attorney.

Indiana Above Median Bankruptcy Means Test

You may have figured out that your income is higher than the average household income in Indiana. Don't worry, though, because you might still qualify for bankruptcy in a couple of ways.

First, there's the "Statement of Exemption from Presumption of Abuse Under §707(b)(2)." It's a way of saying that you might still qualify if you can show that you have unique circumstances or expenses that make it unfair to assume you're abusing the system. Secondly, we have the "Chapter 7 Means Test Calculation." This part allows you to subtract your qualified monthly expenses from your current income. This will give you an idea of your disposable income, which is the money you can use to pay off your debts. It's important to note that disposable income is left over after you've paid all your necessary expenses. If your disposable income falls below a certain amount, you may still be eligible for Chapter 7 bankruptcy.

You can take the Chapter 7 Means Test Calculator below estimate your initial qualification. If you find that you may not qualify, it may be worth considering your expenses to see whether you can qualify that way.

Allowable deductible expenses

If you're going through the bankruptcy means test, you might wonder what expenses you can deduct. Here are some of the expenses you may be able to remove:

• Union dues, retirement plans, and uniforms may be mandatory employment deductions.
• Premiums for health and disability insurance.
• Income taxes.
• Child care expenses.
• Premiums for term life insurance.
• Payments for secured debts on your car and home.
• Alimony and child support payments.
• Charitable contributions, but there's a limit based on a percentage of your income.

You may also be able to deduct other expenses for exceptional circumstances. These deductions are limited and depend on the number of people in your household. You can check out the current national standards to find out the maximum amounts allowed for these expenses.

• Expenses for housekeeping supplies.
• Clothing expenses.
• Food expenses.
• Expenses for personal care services and products.
• Housing and utility expenses.
• Transportation expenses.
• Out-of-pocket healthcare expenses.

If you still have questions, it may be a good idea to contact a local bankruptcy attorney in Indiana who can give you a free evaluation. They'll be able to guide you through the process and provide the specific information you need.

What Happens If You Fail the Bankruptcy Means Test?

If you may not pass the means test, you can also look at alternatives to Chapter 7.

One option to consider is filing for Chapter 13 bankruptcy in Indiana. This type of bankruptcy allows you to create a repayment plan to settle your debts over time.

You can also explore other bankruptcy alternatives that might suit your situation. Debt settlement, debt management, and debt payoff planning are a few options. These alternatives offer different approaches to help you tackle your debt and regain control of your finances.

So, even if bankruptcy means the test doesn't go your way, don't lose hope. There are still paths to explore and solutions to discover.

Chapter 13 Bankruptcy

A Chapter 13 bankruptcy in Indiana is like a wage earner's plan. Instead of wiping out all your debts like in Chapter 7, you'll create a payment plan to repay some of your unsecured debts. Typically, you may be able to keep your assets, and there's no need to qualify as long as you're under the debt limits. Plus, it stays on your credit report for seven years instead of 10. The catch is it can take either 36 or 60 months to complete. However, your payment plan might be shorter if you're in 100% Chapter 13.

Some individuals prefer Chapter 13 over Chapter 7 bankruptcy if they have more equity than what's allowed under the Ohio bankruptcy exemption; Chapter 13 might be the way to go.

Debt Settlement

Debt settlement is where you or a company negotiate with creditors to reduce your debt balance. Instead of paying back the total amount, a portion of it gets forgiven. For instance, if you have around $50,000 in debt, debt settlement can bring that number down to $25,000.

Now, debt settlement usually comes with a payment plan. This plan can stretch anywhere from 12 to 60 months. So, you'll have time to chip away at that reduced debt and get your finances back on track.

Before you jump into debt settlement, you need to know something. Not all debt settlement companies are the same. Some of them charge around 25% or more of your enrolled debt. That can add up over time, so ask for a breakdown of the fees.

Be cautious when choosing a debt settlement company. You want to make sure you're getting a fair deal. To help you out, you can check the Consumer Finance Protection Bureau's latest info on debt settlement programs.

You don't have to limit yourself to local debt settlement firms in Indiana. Many of these companies are nationwide, so you've got options. Keep that in mind as you explore your debt settlement journey.

Debt Management

Debt management, or credit counseling as some may call it, is when a company steps in to help you out by negotiating a lower interest rate on your debt. Let's say you're stuck with around a 22% interest rate on your debt. A debt management company might be able to work to bring that rate down to a more manageable 9%. Something to remember is that most debt management companies are non-profits, and they're usually able to work on your credit card debt. But when it comes to unsecured personal loans, they might be unable to help. They'll set you up with a payment plan typically lasting anywhere from 36 to 60 months. Similarly to debt settlement, don't worry if you can't find a local debt management company in Indiana. Many of these firms operate nationwide, so you've got options.

Summary

Understanding the bankruptcy means test and income limit in Indiana for Chapter 7 bankruptcy qualification can be complicated. But don't worry; many people prefer Chapter 7 bankruptcy because it's often cheaper than other ways to get rid of debt. So, let's break it down and make it easier to digest.

First things first, the means test and income limit in Indiana for Chapter 7 bankruptcy work like this:

1. Your household income is compared to the Indiana income limit. Some incomes count, while others don't.
2. If your household makes more than the income limit, you may still qualify for Chapter 7 bankruptcy in Indiana based on your expenses and deductions.
3. Don't lose hope if you don't pass the bankruptcy means test! Other options are still available, such as Chapter 13 bankruptcy, debt settlement, and debt management.

If you want to see if you may qualify for Chapter 7 bankruptcy, you can use the Indiana bankruptcy means test calculator below.