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I'm filing bankruptcy. Would it matter if I reduce my take home pay by lowering my W-4 exemptions from 4 to 1?

Woodbridge, VA |

I understand that there is a "means test" to qualify for INDIVIDUAL Chapter 7 bankruptcy. I really don't want Chapter 13 and the long term commitment that accompanies it (5 years repayment). I'm concerned that I make too much (72K yearly) to qualify for ch7, although my unsecured debts are just under 100K and I can no longer make the minimum payments and maintain other living expenses. I'm married and my spouse makes 52k a year. I owned a home (mortgage is underwater by 9-12k). My mortgage is current however. My 2001 vehicle is paid for. I also provide monetary assistance from time to time to a disabled parent out of state. Reducing my w-4 exemptions and allowing additional taxes to be taken out of my check would be a short term problem I'm willing to cope with if I can get a ch7.

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Attorney answers 4


Forms B22x call for gross income "above" the line, so payroll deductions have no impact on whether a debtor is considered to be above or below median. B22A and B22C call for deducting ACTUAL expected tax liability, so increasing withholding has no impact on the required dividend to unsecured creditors. At your level of income, it's foolhardy to think about filing for bankruptcy without the help of an attorney, so I strongly suggest that you stop trying to figure this out yourself.


You are cfertainly smart to try to avoid Chapter 13 if there is any way.

It is possible for someone living in Woodbridge with a family income of $125,000 to qualify for a Chapter 7. It's obviously not easy, and changing your withholding is probably not going to get you there.

I explain some of the strategies I try in my link, below. Some other ideas, I don't like to put in print.


The means test is based upon gross income. I suggest you invest in a consultation with a bankruptcy attorney to have him/her run the numbers for you. You should not try to do it on your own. If your income is above the means test amount for the size of your family, you need an experienced professional to finesse the numbers. Good luck.

Be sure to designate "best answer." If you live in Oregon, you may call me for more detailed advice, 503-650-9662. Please be aware that each answer on this website is based upon the facts, or lack thereof, provided in the question. To be sure you get complete and comprehensive answers, based upon the totality of your situation, contact a local attorney who specializes in the area of law that involves your legal problem. Diane L. Gruber has been practicing law in Oregon for 26 years, specializing in family law, bankruptcy, estate planning and probate. Note: Diane L. Gruber does not represent you until a written fee agreement has been signed by you and Diane L. Gruber, and the fee listed in the agreement has been paid.


Gross income is the key here for the presumption. Inaccurate tax witholding and an inaccurate number in that line will get you a conversion or dismissal. The US trustee looks for abuse and if you have disposable income then you have to do a Chapter 13. The numbers should be run by an attorney who has experience. The courts and US Trustee are certainly aware of what your actual taxes are because they see your tax returns. You are just looking for trouble!

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