We're trying to determine how we'll do in regards to the Means Test in IL. I see that the past 6 months of income is used as a value. The last 6 months for us will show a better scenario. My wife's job just cut her hours dramatically and another part-time employer released her. This is what will cause some definite financial issues.
Is our scenario taken into account when deciding if we qualify for a Ch 7 bankruptcy?
This is a fascinating question, which was actually just (sort of) addressed last month by the Supreme Court's decision in Hamilton v. Lanning. That case wasn't about a Ch. 7, but involved a Ch. 13 in which the debtor's prior six-month income included a buyout that represented an income "increase" just prior to her termination (which, of course, means zero income). The debtor argued that her lowered projected disposable income was a "special circumstance" under the Bankruptcy Code that would justify lower plan payments. The Ch. 13 trustee wanted to base Ch. 13 plan payments on the higher income.
So what does all this have to do with Ch. 7? The trustee specifically argued that the debtor should have either filed a 7 or converted to a 7 by using "special circumstances" to rebut the means test presumption of abuse. The Court disagreed, stating that the trustee directed the Court to "no authority for the proposition that a prepetition decline in income would qualify as a "special circumstance." This is good news for Ch. 13 filers who experience a sudden drop in income, but not necessarily good for Ch. 7 filers who wish to demonstrate special circumstances such as the one you have described.
You definitely should consult with an attorney to plan the right course of action. Good luck!
It will be taken into consideration now pursuant to the Hamilton v. Lanning decision decided by the Supreme Court, but you must have an experienced attorney who knows the mechanics of the means test and bankruptcy law to argue the issue for you.
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