Determining Chapter 7 eligibility with a means test

Are you considering filing for bankruptcy and keep seeing the term "means test?" The means test was developed to determine if you are eligible for Chapter 7 bankruptcy and to aid in separating Chapter 7 eligible persons from those who are not eligible.

The means test is a series of questions involving income and expenses. Qualifying begins with determining your income and whether it is higher or lower than the median of the state you reside. If it is lower, you pass and are ready to file for Chapter 7. If its higher, there are a few more steps to determine whether you pass. Determining your excess income and your debts is crucial at this point as you need to have more debt than income in order to pass. Keep in mind that the medians change from state to state and include differed levels of allowed expenses. In the event that you fail the Chapter 7 means test you could still qualify for Chapter 13.

So, you passed the means test, should you file?
As with many legal matters circumstances can vary and its important to consult an attorney before deciding to file. However, determining your filing eligibility using the means test is an important step in the process. The means test uses information needed to fill out bankruptcy forms and will help you regardless of if you pass or fail.

As with any legal matter you should discuss all of your options with your attorney and make a fully informed decision. Contact the law office of Erwin F. Meiers today.