What Is the Bankruptcy Means Test?

The test determines if you are qualified to file for Chapter 7 bankruptcy.

The Bankruptcy Code has a section – a means test – to determine if a person is taking advantage of the bankruptcy law. In a nutshell, if your household income is above the median income for a family of your size, it is presumed you cannot qualify for Chapter 7 bankruptcy.

  • First and foremost, do not assume you cannot pass the means test.
  • The means test is not black and white. The law allows deductions to your income in determining your eligibility.
  • The means test does not apply to business debt.
  • Special circumstances (being in the military, for example) can change your status.
  • If you cannot file for Chapter 7, you can probably file for Chapter 13.

Chapter 7 bankruptcy allows you to discharge unsecured debt such as credit card bills and medical bills. Chapter 13 bankruptcy allows you to reorganize your debt into payments based on what you can afford to pay.

Call 1-877-ONE-DEBT and find out if you can pass the means test for Chapter 7 bankruptcy.

At the Bond & Botes law offices, we represent people in Alabama, Mississippi and Tennessee in filing for bankruptcy. Come in for a FREE initial consultation about the means test and your financial situation.