Bankruptcy Definitions
Disposable Income - Your disposable income is defined as your gross income minus your expenses and allowable deductions.
Home EquityThe difference between the current fair market value of your home and what you still owe. If your home has been appraised for $100,000.00 and you owe $75,000.00 on your mortgage, your equity is $25,000.00.
Means Test - A test used to determine bankruptcy eligibility. It works by deducting specific monthly expenses from your "current monthly income" (your average income over the six calendar months before you file for bankruptcy) to arrive at your monthly "disposable income."
Special Circumstances - The debtor can establish the presence of "special circumstances," such as recent unemployment, unusually high rent, or a serious medical condition. To demonstrate the special circumstance, the debtor must provide documentation for the requested expense or adjustment to their income and must explain the necessity of the adjustment or expense.
Unsecured Loans - An unsecured loan is money lent from one party to another without any collateral to secure its repayment.
