Before filing for Chapter 7 bankruptcy, you must be able to pass what is known as “the means test.” The means test is designed to ensure that only those who have no way to pay their current debts are able to use Chapter 7 to wipe out a portion of those debts. The means test is not always easily understood, as it is a set of somewhat complicated rules. Understanding the means test is the first step to understanding which method of filing is best for you.
A Bankruptcy Lawyer Can Help
The means test deducts certain monthly bills and expenses from your current monthly income to generate a number called your disposable income. Your disposable income cannot be above a certain level if you intend to file under Chapter 7. If you earn less than the median income level for your state, you are automatically qualified to file. If you earn more, then you must determine whether deductions can make you eligible. There are online tools for determining this, but the best method for avoiding errors and wasted time is to consult a bankruptcy lawyer.
A Tampa bankruptcy lawyer can help you to pass the means test, if you are not sure what to do. The bankruptcy means test has been described as complex but generous, with many able to meet its requirements. Online tests will help get you started in the right direction, but your bankruptcy lawyer has the training and the experience to navigate this complexity and guide you to the right solution for your financial future and health.
The means test only applies to individual filers of Chapter 7, not to businesses filing.