How To Have A Successful Chapter 7 Means Test

To file for Chapter 7 bankruptcy, you'll need to pass a means test. This is used to determine if you have the means to pay your debts or if you really qualify to file for Chapter 7 bankruptcy. 

The Rationale of Chapter 7 and Means Tests

The purpose of a means test is to make sure that those who have the means to pay off their debts do not qualify. Instead, they will be required to file for Chapter 13 bankruptcy and pay some or all of their debt owed. The bankruptcy test will determine if you fall below the median income for you or for someone with your family's size. You can also determine if you have any exemptions to the means test. 

Documenting Your Expenses

You will also have to gather documentation regarding your expenses. Your expenses will need to be allowed expenses. Make sure to be very thorough and do not omit important details because you'll be more likely to have your case thrown out. This can be the longest and most involved part of the process, and you will want to be completely honest when working with your attorney. The type of expenses you are allowed to have is based on both local and national standards determined by the Federal government. With the help of your lawyer, you'll be able to have all your expenses documented. 

Chapter 7 and a Disposable Income

Even if you have a disposable income and the disposable income is low enough, you will still qualify for Chapter 7 bankruptcy. However, with a larger disposable income, the courts will instead expect you to use that income to pay down your debts.

Chapter 7 Calculations

Sometimes, the calculations for the means test are very straightforward. In other cases, the calculation for the means test can require several steps that you'll need to be walked through by your attorney. 

Avoiding the Means Test

If you are not interested in the means test, you'll fortunately be able to avoid the test if all of your debts are related to taxes, if you are a reservist or a National Guard Member, if you are a disabled veteran, or if your debt is entirely non-exempt. 

Because it is very important that you pass the bankruptcy means test, make sure to work with a bankruptcy attorney who can make sure that you know everything that must be done to pass the test. For more information, consult with a law firm like Merna Law.

About Me

Just What Can a Bankruptcy Attorney Do For You

I never thought that I would personally be dealing with a bankruptcy situation. However, we found ourselves in a situation where filing for bankruptcy was the best option for moving forward. There are many different types of bankruptcy that a person or a business can file for. Additionally, there are attorneys that specialize in dealing with different types of bankruptcy situations. Figuring out what option to go with can a bit tricky and intimidating for the average person. The purpose of this blog is to assist you in figuring out what you need to do and which type of attorney you need to hire to assist you with filing for bankruptcy.