Legal Question in Bankruptcy in Nevada
My husband and I are filing chapter 7 bankruptcy. We currently reside in Las Vegas, NV but are moving to Colorado in a week. Our bankruptcy is going to include a small business that we closed and all of our personal debt including our home. The debt adding up to about $400,000- $500,000. When we move to Colorado we plan on having jobs. We have to wait 6 months to file. My concern is, is there a certain amount of money that we an legally make when filing for Chapter 7 bankruptcy?
Thank you,
1 Answer from Attorneys
You have made an incorrect assumption that I must correct -
You do not need to live in the new state 6 months to file a Bankruptcy. The rule requires that you live in the new state during the larger part of the previous six months. That means 3 months & one day.
To qualify to file a Chapter 7 Bankruptcy, you have to past two tests. The total amount you make is irrelevant. If your average income is above the Median amount (which is different in every state, and depends on the size of your family), you must have enough deductions to pass the "Means Test." But even if you pass the "Means Test," you must also pass the "budget test." The "budget test" establishes what you have left over after paying your necessary living expenses. If you have more than $100 - $150 left over in your budget after paying your necessary living expenses, in Nevada, the Courts may require you to go into a Chapter 13 to pay part of your debt. But the application of the budget test may be completely different in Colorado, so I would suggest that you discuss this with whatever attorney you hire.
Most of my clients can pass the Means Test, but they can't pass the budget test.
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