Legal Question in Bankruptcy in Iowa

Bankruptcy question

My wife has file for divorce. We owe more than our house is worth by quite a bit and have substantial credit card debt. It appears we will both have to file bankruptcy. Her income is low enough where she will qualify for Chapter 7 because she is below the median income, however I had been working part time during the last six months and my income is well above the median and I would not pass the means test (by my calculations). In fact, I would end up paying most if not all of the credit card debt myself. If I reduce my income over the next month and a half to 0 though, I will be very close to the median income for the last six months and would probably pass the means test and also get Chapter 7. My question is...can I take a leave of absense from my job or quit entirely to reduce my income over the next month and a half to qualify for Chapter 7 based on my past six months income at that point?

Thank you for your immediate assistance.

Sincerely,


Asked on 8/13/07, 9:25 am

1 Answer from Attorneys
Daniel Press Chung & Press, P.C.

Re: Bankruptcy question

Yes, but passing the means test is only part of the issue. If the court were to find that your filing is an abuse based on projected income, the case could still be dismissed. Also, with your mortgage, you may well pass the means test even if over median - see a bankruptcy lawyer now.

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Answered on 8/13/07, 9:45 am


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