MEANS TESTING – THE COMPUTATIONS The Means Test

A presumption of abuse exists if the individual consumer debtor’s “current monthly income,” i.e. gross income, exceeds allowed expenses (and other allowed deductions and payments) by more than $100 per month, unless the excess per month multiplied by 60 will not pay at least 25% of the debtor’s non-priority unsecured claims. If the individual consumer debtor’s “current monthly income” exceeds expenses by more than $167 per month, abuse is presumed irrespective of the percentage of debts the monthly income will pay. Stated another way, if the “net monthly income” is more than $167 per month, abuse is presumed. If the net monthly income is less than $100 per month, the means test is not met and cannot be the basis for a motion to dismiss. If the net monthly income is between $100 and $167 per month, abuse is presumed only if the total net monthly income for 60 months would pay more than 25% of the debtor’s unsecured debts. Again, the means test does not apply to individual consumer debtors whose “current family income” is below the median income of the individual’s state or to individuals whose debts are not substantially consumer debts.

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