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What is the Bankruptcy Means Test?
One of the first steps you must take when filing for bankruptcy is to complete a “means” test. You must submit the results of this means test to the Bankruptcy Court.
he new bankruptcy law passed in 2005 was designed to keep people with higher incomes from filing for Chapter 7 bankruptcy. The means test checks your income in order to determine your eligibility to file for bankruptcy. If your income is below the average for your state, then you can file for Chapter 7 bankruptcy without any problems.
However, if your income is above the state average, the calculations for the means test become more complex. The means test looks at your disposable income (the amount left over after paying your expenses). If your disposable income is too high, the Bankruptcy court may decide that you can pay off at least some of your debts, and prevent you from filing for Chapter 7 bankruptcy. You are still able to file Chapter 13 bankruptcy, however.
No matter how the means test turns out, it is a good idea to hire a lawyer to help you with your bankruptcy. Even if you qualify for filing a Chapter 7 bankruptcy, it may not be in your best interests to do so. A qualified attorney can help you make the right decision on filing, and make sure the entire process is a successful one.
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