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The Military and the Means Test

 Happy Veterans Day! At The Kehl Law Firm, we appreciate all the servicemen and women who have helped keep us safe. Today I am going to talk about some of the ways Congress has decided to help make bankruptcy easier for our veterans and active military who are overwhelmed by debt in the United States and specifically in Central Texas. In 2005, Congress drastically changed the U.S. bankruptcy laws. One of the major changes is an income test called the means test that was added to the bankruptcy code. Basically, the test looks at the last 6 months of gross income for the household filing bankruptcy and compares the income for households the same size in the same county. If you have more income that households the same size in the same county, there is a presumption that you cannot file a Chapter 7 bankruptcy. As a bankruptcy lawyer in Waco and Killeen, the reality is that I have filed numerous Chapter 7 bankruptcies for Central Texas families who "make too much to file bankruptcy" and defeated the presumption. They all have Chapter 7 discharges now. However, there are two ways to help Veterans and Active duty military with the means test. First, the Means Test Does Not Apply to Disabled Veterans One way Congress has tried to help veterans is by stating that disabled veterans do not have to take the income test. If your disability is rated at least 30% and more than half of your debt was incurred while you were on active duty or performing a homeland defense activity, you don't have to take the means test. This means you get to file for Chapter 7 bankruptcy regardless of how much income you make. Second, being on active duty might overcome the presumption for the means test If you are not a veteran and your income is high enough to cause the presumption that you should not be allowed to file a Chapter 7 bankruptcy, you might still be able to file for a Chapter 7 bankruptcy if you can show a special circumstance in your case. Although "special circumstance" is not defined in bankruptcy law, Congress has cited as an example of a special circumstance, "a call or order to active duty in the Armed Forces." This means that if you have extra expenses because of your military service that wouldn't otherwise be counted for purposes of the means test, you may be able to overcome a presumption of abuse -- and be permitted to file for Chapter 7 bankruptcy. Our active military and veterans have gone above and beyond the call of duty to protect this great country. I am honored to be able to give back. If you are drowning in debt, let us help. We offer military discounts and will work with you to find the best solution for your individual circumstances. Call 254-633-2876 or email us at [email protected] today for a FREE, no-obligation consultation to see what an experienced Central Texas bankruptcy attorney can do for you! We offer evening and Saturday appointments. Sign up for our Bankruptcy Information Mailing List.  This list is for those who have questions about bankruptcy as well as clients of The Kehl Law Firm, P.C.  Sign Up

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