Understanding the Bankruptcy Means Test in Oklahoma

In Oklahoma, navigating the complexities of bankruptcy can be daunting, particularly when it comes to the Bankruptcy Means Test. This test was established as part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, aimed at determining who qualifies for Chapter 7 bankruptcy based on their income level.

The Bankruptcy Means Test essentially compares your average monthly income to the median income for a household of your size in Oklahoma. If your income is below the median, you’ll typically qualify for Chapter 7 bankruptcy. As of the latest data, the median income for a family of four in Oklahoma is approximately $81,000 per year. For smaller households, the figure varies, so it’s important to check the most current statistics. Generally, the lower your income, the more likely you are to qualify for debt relief through Chapter 7.

To perform the Means Test, you’ll need to calculate your average monthly income over the six months prior to filing for bankruptcy. This includes wages, salaries, bonuses, rental income, interest, and even unemployment benefits. If your average income falls below the determined median, you may proceed to file for Chapter 7 without any further complications.

If your income is above the median, the Means Test requires further calculations. In this case, you’ll be required to account for certain allowed expenses such as housing costs, utilities, and transportation. This is where the test can become complicated, as it involves itemizing your expenses to see if you qualify under the means of paying back debts in a Chapter 13 repayment plan instead.

It’s essential to understand that certain deductions, known as "allowed expenses," are considered during this calculation. If your disposable income after accounting for these expenses is deemed sufficient to repay a portion of your debts, you may be directed to file for Chapter 13 bankruptcy instead of Chapter 7.

In Oklahoma, it’s advisable to consult with a qualified bankruptcy attorney who can guide you through the Means Test and ensure accurate completion of the required forms. Failing to properly complete the test or misrepresenting your financial situation can lead to case dismissal or even allegations of bankruptcy fraud.

In summary, the Bankruptcy Means Test in Oklahoma is a critical step in determining eligibility for Chapter 7 bankruptcy. Success in navigating it not only depends on your understanding of income and allowed expenses but also on seeking the right legal assistance to accurately assess your financial situation. By doing so, you can find the most suitable path to regain your financial footing.