When you find yourself in a situation where you have more debt than you can reasonably repay, you may have to make difficult decisions about your obligations for payment when you receive income. This could leave some bills unpaid and accruing interest, as well as late fees and other charges. All of those additional costs for your existing debt can make getting in control of your finances almost impossible.
Thankfully, bankruptcy protections are an option for many Americans struggling with unsustainable levels of personal debt. Chapter 7 bankruptcy is arguably the most aggressive form of bankruptcy for an individual, as it does not require a repayment plan that lasts several years prior to discharge. Instead, an individual can theoretically receive a discharge within weeks or months, all without attempting to repay their unsecured debt.
In order to prevent the abuse of such a generous debt forgiveness system, the federal government has rules in place to ensure that only those truly experiencing financial hardship can file for Chapter 7 bankruptcy. In order to qualify, you will have to pass a means test.
What is the means test for Connecticut?
Performing the means test involves making some adjustments to your currents income, including reductions for certain expenses like mortgage. You then compare your adjusted income to the state median income for your household size. Provided that your income matches or is lower than the state median, you pass the means test and can file for Chapter 7 proceedings.
If you file as an individual with no dependents, the maximum income you can have and still pass the means test is $66,689. Households with two members can have a maximum adjusted income of $88,594, while families of three can have an income of up to $101,666. Finally, if there are four people in your family, your maximum household income that will allow you to pass the means test will be $127,714. There are additional adjustments for those with even larger families.
Are you on the verge of qualifying or unsure if you do?
Median means average, which means there will be quite a few people whose household income hovers right around the amount included in the Connecticut state means test. Just because your income is currently close to the maximum amount allowed under the means test doesn’t mean that you have no options.
Discussing your situation with an attorney can be a great way to better explore if you qualify for Chapter 7 proceedings in Connecticut.