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How means testing works in South Carolina

In South Carolina and throughout the nation, bankruptcy is designed to provide debtors with relief when they find themselves unable to pay their bills and still cover their living expenses. People who are struggling financially can work with the courts to either have their debts written off or restructured into more affordable payments. Before either plan of action can be approved, the courts will conduct means testing to determine whether the debtor will be eligible to file under Chapter 7.

National standards have been developed based on family size and general location. In most cases, debtors will claim these national standards regardless of their actual spending. One such standard covers food, clothing and other items. This encompasses purchases like cleaning supplies, laundry detergent, apparel, personal hygiene and care products and other household items. The amounts are set in accordance with the Consumer Expenditure Survey conducted by the Bureau of Labor Statistics.

Health care is another expense that is covered by the means testing. The courts provide allowances for out-of-pocket health care expenses on items like medication, medical supplies and medical services. In the case of housing and utilities, the covered charges include mortgage or rent, interest, property taxes, maintenance, utilities and repairs. Where transportation is concerned, people are allowed to take the lower of their actual car ownership costs or the maximum allowance. If a car is paid in full, then the debtor may only claim maintenance costs, repairs, and fuel. However, there is an allowance for a note if a car is financed and still has a balance due.

Before individuals file for bankruptcy, they should meet with an attorney to learn more about the means testing. An experienced personal bankruptcy attorney can discuss the other eligibility requirements with a client.

Source: The United States Department of Justice, "Means Testing", October 21, 2014

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