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Alabama Bankruptcy Lawyers Focus on Bankruptcy Means Test

According to bankruptcy law, your income and expenses will be reviewed to determine whether you are eligible to file for Chapter 7 bankruptcy or if you must file Chapter 13.

This determination is made by way of the means test, which the courts use to review your average income for the six months prior to the filing and compare it to the median income in Alabama. If the income is less than the median, then you may elect to file for Chapter 7 bankruptcy, but if your income is greater than the median, the rest of the means test will be used to decide if you might still qualify for Chapter 7 or if you must file for Chapter 13.

Bankruptcy Means Test

Here are the basics of the bankruptcy means test:

• If you cannot pay at least $6,000 over the next five years, or $100 per month, after expenses to your unsecured creditors, you could still be able to file for Chapter 7 bankruptcy.
• If you afford to pay a minimum of $10,000 over five years – $66.67 per month or more – you might not be eligible for Chapter 7.
• If you can pay $6,000 or more but less than $10,000 over five years, then a calculation will be made to determine your eligibility for Chapter 7.
• If you can afford to pay 25 percent or more of your unsecured debt (such as medical and credit card bills), then a Chapter 7 filing will probably be unsuccessful.
• If you cannot afford to pay 25 percent of your unsecured debt, you will probably qualify for Chapter 7 bankruptcy protection.

Contact an Experienced Mobile, Alabama Bankruptcy Attorney

Are you considering filing bankruptcy but need competent legal advice? Contact the experienced bankruptcy lawyers Bond and Botes, P.C. online or call 1-877-581-3396 to discuss your financial situation today.