Here at the Law Offices of Barbara B. Braziel we support charitable giving and tithing. Making donations to charity is a good thing. Not only does it make us feel good, it helps do good in our communities, our country, and the world. Charities are non-profit organizations that exist to help people and communities, to advance causes, and provide services.
Charitable Donations While In Bankruptcy
Federal Bankruptcy law does not bar debtors from making charitable donations before, during, or after bankruptcy. We’re pleased to tell you that as long as your donations are made in good faith, you are allowed to continue making those donations!
The amount you’re allowed to donate is not technically limited, though generally speaking it cannot exceed 10% of your income. Also, when you file for bankruptcy you may be asked to provide documentation to prove your donations and the amounts.
Donations & Qualifying for Bankruptcy
Did you know that your donations may actually help you qualify for Chapter 7 bankruptcy?
The bankruptcy Means Test determines whether or not you qualify for bankruptcy relief under Chapter 7. If your income, adjusted for family size falls below the median income in your state then you automatically qualify for Chapter 7 and do not have to run the means test.
If your income is above the median for your state, then you must run the means test to determine if you qualify for Chapter 7. Charitable donations are an allowable expense in the means test calculation. Therefore, your donations may help you qualify for Chapter 7 bankruptcy.
To learn more read our article The Bankruptcy Means Test Explained.
Donations Must Be Made in Good Faith
Donations cannot be used solely to pass the means test and qualify for Chapter 7 bankruptcy. Your donations must be made in good faith. For example, you may not increase the amount you give just prior to filing bankruptcy in an effort to pass the means test. Also, you may not make donations as a way to evade your creditors or to avoid paying back your debts.
Donations Must Be To Qualified Organizations
To include your donations in the means test calculation, the charity must be a qualified non-profit organization by IRS standards and must hold 501(c)(3) status as a government registered and approved non-profit organization.
From all of us here at The Law Offices of Barbara B. Braziel –
Thank You for the donations you make to the charities that support our communities!
We invite you to learn more about our firm here and come meet with us for a free no-obligation consultation. We proudly serve the people of Savannah, GA and surrounding areas. Reach out to us by email at info@BrazielLaw.com or call (912) 351-9000.
We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.