How the I.R.S. National Standards Affect Your Chapter 7 Means Test

One of the first things that you must do if you want to file for a Chapter 7 bankruptcy is to pass the Chapter 7 means test

. The Chapter 7 means test has two portions. First, you will have to compare your income to the state median, and second, you will have to compare your expenses to a national standard given by the IRS and determines your disposable income.The IRS national standards tell you how much you should be spending on different expenses depending on your family size, such as food, clothes, personal items, and so on. Here's an example of the national standards: a family of four is given a budget of $752 for food a month.If you're thinking that sounds like a low number, you're right. It probably isn't what the vast majority of Americans spend, and you probably spend more than the national standards. But this number given by the IRS can serve as a baseline for you to start planning a budget that stays within your family's means. With a good budget in hand, you can get a second chance. A Chapter 7 bankruptcy is able to get you credit card debt help, protection from creditor calls, and protection from repossession for you to have a clean slate to begin again--finally living the life that you wanted to, without having to worry about harassing creditor calls or repossession.After you finish a Chapter 7 bankruptcy, you will have the opportunity to rebuild your credit. In order to avoid ever having to file bankruptcy again, it's essential not to spend beyond your means so you can get the second chance you need. The IRS national standards are really just a good guideline for what you should budget for. As long as you stay within your means, you shouldn?t have to seek out credit card debt help, wage garnishments, or protection from creditor calls ever again. Bankruptcy is a strong first step towards lifelong financial security.It is essential that you make a reasonable budget--and stick to it! A Chapter 7 bankruptcy gives many people the legal tools to get a new beginning.

How the I.R.S. National Standards Affect Your Chapter 7 Means Test

By: James Brown

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