Expert: Mark J. Markus- California Bankruptcy Attorney - 8/6/2009

Question
Hi Mark, if you'd be so kind I have a follow-up to an issue I asked about earlier. Here is a different way to approach that issue:

Considering employment income only, I am under the income limit for the means test in my state by $4000. However, I also have some capital gains and losses in four investment accounts. During the means-test period, the net gain from three of the accounts was negative, while one account had a positive net gain of $148.

Am I permitted to consider the four accounts as four separate revenue streams and enter the net gain from each account under the business entry of the means test? Doing so keeps me under the income limit since I only had the one account with a positive gain of $148.

However, if I am not permitted to enter the net gain from each account and instead must enter the net gain from each individual stock trade, then I have a $10,000 net gain from one stock trade and that gain would put me over the income limit.

Thanks again, Mark. After this I won't bother you anymore!

Answer
I've already answered that question, and my answer hasn't changed.

One thing I will point out is that merely being above the median income doesn't mean you automatically fail the means test.   The means test is a very complicated set of numbers and you really need an attorney to analyze your situation.

Also, depending on where your case is being filed, not passing the means test also doesn't mean you necessarily can't file a Chapter 7 case--it merely raises a "presumption of abuse".   If the capital gains in the last 6 months are not likely to be repeated, then you can always explain that and see if the court will allow you into a Chapter 7.

In any event, you need to consult with an attorney in your area who can go through all the specifics of your situation, as well as provide you with knowledge of the local practice and procedures, in order to better guide your decisions.   

Finally, there is also the obvious solution of waiting 6 months from the last capital gain transaction in order to file your case.

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