Means Test Helps Debtors Determine, am I Qualified to File Chapter 7?
How do you make sure you’re bankruptcy qualified, in the very first instance? As a rule, most people who want to file for bankruptcy would ordinarily like and prefer simplestartllc to be able to file the Chapter 7 type, assuming they could, as that would allow them to discharge most of their debts outright, and not have to pay them back. However, to be able to file for Chapter 7 bankruptcy, you must FIRST qualify to do so under the Chapter 7 means test requirements. And it would help if you can have means test made simple and a simple formula for doing that.
FIRST, WHAT IS THE MEANS TEST IN BANKRUPTCY?
Basically, that’s the formula by which a debtor can become bankruptcy qualified. Usually applicable in personal bankruptcies involving the consumer types of debt, the means test is basically a series of financial calculations (“tests”) done by filling out and completing a form, the objective of which is to determine if the consumer completing the form (or for whom it is being completed), qualifies for bankruptcy. And whether he or she qualifies to file under Chapter 7, or whether he/she is condemned to file under Chapter 13 – meaning those who are deemed to have the financial capacity to pay some money on their indebtedness to their creditors.
First, the means test would compare your income to the “median income” of other residents in your state. If your income is lower than the median income in your state, then it means you can file for Chapter 7 bankruptcy. Next, however, if your income is greater than your state’s median income, other calculations regarding your income and allowable expenses would then have to be made, the sum total of which would determine whether or not you can file for Chapter 7 bankruptcy.