In 2005 the government passed the BAPCPA which made the current bankruptcy laws stricter, and created a means test which debtors must pass in order to file for chapter 7 bankruptcy. With such a large number of Missouri chapter 7 bankruptcies filed in recent years, there were a lot of residents liquidating their assets to repay creditors, and left a lot of Missouri residents looking for auto ownership.
The Missouri bankruptcy means test was designed to keep wealthy debtors from filing for a chapter 7 bankruptcy if they had the means to repay their creditors with a low monthly payment for a three to five year time period.
Chapter 7 Bankruptcy Means Test Missouri Process
- Your currently monthly income (CMI) is calculated against the Missouri state median income level set by the government. If your CMI is lower than the set amount then you automatically qualify for a chapter 7 bankruptcy, if it is higher than the MO state median, then you must pass the next to steps of the means test.
- In this step your CMI is reduced by both national or local pricing standards and your actual expenses. These include but are not limited to; taxes, child care, alimony, food, clothing, and child support expenses.
- Step 3 multiplies your unsecured debts by 25%. If after your disposable monthly income (DMI) multiplied by 60 is less than 25% of your unsecured debt, you have passed the means test and are able to file for a Missouri chapter 7 bankruptcy.
Bankruptcy Car Financing in Missouri
After you have passed the means test and you filed an application for a chapter 7 bankruptcy you trustee will set up a 341 hearing, which is a meeting of creditors that you are required to attend. Only after this meeting is over can you apply for an auto loan while in chapter 7.
Here at Bankruptcy Auto Financing we can help you get set up with car dealers that work with bankruptcy. Start today by filling out our online application.
Remember we are not lawyers and cannot give legal advice. The situations discussed are only our experiences over the years and may vary with each customer.