The Means Test and Chapter 7
A San Jose bankruptcy lawyer explains the means test and Chapter 7 bankruptcy
For bay area consumers wondering about the means test and Chapter 7 bankruptcy, the means test is a method to establish whether an individual meets the qualifications for a financial assistance program (including government assistance). While Means testing is also used in Medicare benefit distribution and has been suggested as a solution for the Social Security problem, the most common means test is within a Chapter 7 bankruptcy filing; the Means test is used to determine a person's eligibility to file a Chapter 7 bankruptcy.
The term refers literally to whether a debtor has the financial means to pay their debt, or portions of their debt. The means test is a particularly important factor to deter higher income debtors from filing Chapter 7 bankruptcy, as their financial means would allow them to pay off a portion of their debt, rather then wipe it out altogether via Chapter 7. The higher income consumer, who typically would not meet the requirements of the means test, would then file a Chapter 11 or Chapter 13 bankruptcy.
The means test is complex, but its requirements are typically met by the average Chapter 7 filer.
Means Test at-a-glance facts:
The means test formula determines the debtors income to debt ratio
Debtor income that falls below the state's median income are not subject to the means test
There are online means test calculators, but it is also suggested that you seek the assistance of an experienced bankruptcy attorney if you are considering filing Chapter 7
If you have a question regarding Bankruptcy in San Jose please contact us at 408.279.2288 or visit www.bkanswers.com and we can connect you with one of our experienced San Jose Bankruptcy Attorneys. After you have spoken with one of our San Jose bankruptcy attorneys we can schedule you a free face to face appointment in our office location nearest you. Our team of San Jose Bankruptcy Lawyers can assist you with all aspects of your case. If you have questions about filing a chapter 7 bankruptcy, a chapter 11 bankruptcy, a chapter 13 bankruptcy, lien stripping, cram down, stopping a foreclosure or wage garnishment, discharging debt, etc. we can help! We have bankruptcy attorneys located throughout California who can assist your financial needs. Please feel free to complete our free bankruptcy evaluation and we can quickly determine if you are a qualified candidate for bankruptcy.
