Chapter 7 bankruptcy allows you to discharge most debts, so the court wants to be sure people filing Chapter 7 really do have a need for that level of debt relief.
The means test is divided into two parts:
- In the first part of the means test, figure out your average monthly income for the past six months. If your income is below the median income for the area where you live, you may qualify for Chapter 7.
- If you did not qualify in the first part of the means test, take the second part. Subtract from your income all allowable expenses – basic necessities, housing, transportation, payments on secured debts, taxes, child support, and a few others. If that takes your income below the median, you may qualify.
If you do not qualify in the first part of the means test, talk to an experienced bankruptcy attorney about your expenses. At our bankruptcy law firm, we can help you define which expenses are allowable and which are not.
If you do not qualify for Chapter 7, you can almost always file Chapter 13. Some debts will be discharged and you will have a reorganization and repayment plan for the other debts.
Ask a lawyer to guide you through the means test. Free consultation.
The Bankruptcy Code was designed to help people who have more debt that they can repay. Attorney Brian Blum can explain your rights and help you through the means test calculations. Contact us for an appointment.
