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
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!