Means Test and Chapter 7 Bankruptcy
Can You File for Chapter 7?
If you have been thinking about filing for Chapter 7 Bankruptcy, you’ve probably heard about the "Means Test" and are wondering just what it is. The means test is a series of financial questions that will be used to determine if you are eligible to file for Chapter 7 Bankruptcy. But not everyone is required to take the means test. You are exempt from taking the test and eligible for Chapter 7 Bankruptcy if:
- More than 50 percent of your debt is business debt, not consumer, or personal, debt.
- You are a disabled veteran with a disability rating of at least 30 percent.
- You are in the military reserve or National Guard.
Information You Will Need
To take the means test, you will need to know the following:
- Your current monthly income
- The median income of the state where you live
Question Number One
The first question on the test will determine if you are eligible for Chapter 7 Bankruptcy or if you need to contact an experienced bankruptcy attorney. Are you ready?
Q: Is your current monthly income lower than your state’s median monthly income?
If your current monthly income is below your state’s median monthly income, congratulations, you’re eligible to file for Chapter 7 Bankruptcy.
If your current monthly income is above your state’s median monthly income, don’t despair, there are many more questions on the test. The rest of the test is like filling out a tax return in long form. The final judgment on whether you pass the test will take into account such things as household size, amount of disposable income, loans on cars, mortgages, healthcare costs, food, clothing, entertainment, housing and utilities, and so much more.
Call a San Fernando Valley Bankruptcy Lawyer
Just like you would go to an accountant to get the most favorable tax return, you need to go to a knowledgeable bankruptcy attorney for the best chance to pass the means test. And if you already passed the means test, your debt won’t magically disappear. Bankruptcy is a complicated process, and you’ll need the guidance of a San Fernando Valley bankruptcy attorney.
The legal team at the Encino office of Nader Law Firm has been helping people with their debt issues for 20 years. We are dedicated to finding the best possible solution to whatever finance problems you and your family are facing, and seeing that you get the peace of mind that you deserve. Call (800) 568-0707 today for a free case evaluation.