Free Consultation 888.876.8909
Serving the Okaloosa County
For over Over 20 Years

The Means Test & Chapter 7

Insight from Our Okaloosa County Bankruptcy Lawyers

If bankruptcy is on your radar and you're considering filing, you may have heard of the means test. This test limits the number of people who can file for Chapter 7 by evaluating their monthly income to determine if they are eligible. What sounds confusing and rather daunting is actually quite simple, particularly with the legal counsel of an Okaloosa County bankruptcy lawyer. Our firm has handled hundreds of bankruptcy cases successfully and looks forward to doing the same for you!

Call Richard S. Johnson & Associates, P.A. today to schedule your complimentary consultation.

How do I know if I pass the means test?

In years past, Chapter 7 was the much more popular option for debtors because it wipes out a higher portion of debt than Chapter 13. However, the government established the means test as a way of preventing people from abusing the bankruptcy system.

The means test asks Chapter 7 applicants just two questions:

  • Is your monthly income higher than the average in your area?
  • Do you have enough disposable income to repay certain debts?

If you answer no to the first question, the second question does not apply and you can move on in the filing process. An income that is less than the average income for a similar sized household in your state makes you eligible for Chapter 7. If your income is too high, you then must determine if you have enough money left over after taking care of necessary expenses to repay specific debts. An income that is too high is deemed ineligible, which means you will have to file for Chapter 13.

Although fairly simple, it is beneficial to retain an attorney who understands the bankruptcy process. Doing so can save you from expending unnecessary time and effort when filing. Our firm has over 20 years of experience and would be honored to help you achieve the financial future you deserve. Give our Okaloosa County bankruptcy attorney a call today!