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Means Test Budget Standards Changed

January 29th, 2008    •  by Showell    •   Comments Off on Means Test Budget Standards Changed

On 1/1/08 new IRS collection standards took effect, which means that the numbers used to determine how much a debtor in bankruptcy should be spending on his monthly budget before there is a “presumption of abuse” changed (a presumption of abuse is not a good thing in a chapter 7 because if there is one, then the debtor may not be able to stay in chapter 7; he may have to convert to a chapter 13 payment plan, or dismiss his case entirely),

The new standards can be found at the following site if you want to see how your family budget would measure up: http://www.irs.gov/individuals/article/0,,id=96543,00.html

There were numerous changes in the types of expenses which are permitted, such as some were lumped in with others (cellphones, for example, are not to be listed separately) and food no longer increases based on a sliding scale based on how much a debtor makes.

(Courtesy of National Association of Consumer Bankruptcy Attorneys)

  • Can I go to Jail for not Paying my Bills?

    No, not unless you committed a crime in the creation of the debt (for example, fraud). Simply borrowing money and not being able to pay it back is not a crime. Many creditors representatives will tell you lies on the telephone and say that they will have you put in jail. Perhaps they are too ignorant to know they are wrong or that it is illegal for them even to say that. See More Bankruptcy Q&A