The Means Test
When your circumstances lead you to the point of contemplating bankruptcy, it is easy to become confused by all the financial and legal terminology and the complex details and procedures associated with a filing. This is one reason why, although you can file for bankruptcy protection without the assistance of a skilled and experienced Boca Raton bankruptcy lawyer, it is not generally advisable to do so.
If you are struggling to keep pace with your financial obligations, you do not have to continue to endure this intensely stressful situation. Contact a knowledgeable and compassionate South Florida bankruptcy attorney of Eric N. Klein & Associates, P.A., at 561-353-2800, today to determine whether you may be eligible to file for Chapter 7 bankruptcy protection.
What is the Chapter 7 bankruptcy means test?
The so-called “means test” was introduced as a qualification measure for Chapter 7 bankruptcy in order to prevent filers from abusing the complete discharge of debts that it offers. There had been concern that individuals who had the financial wherewithal to pay off their debts were simply avoiding their responsibility by seeking bankruptcy protection. We recognize that there are cases in which a debtor is truly unable to pay, and so does the law.
To determine whether you are eligible to file for Chapter 7, you must pass the means test. The method for this is generally as follows:
- Compare your average monthly income for the six months prior to your filing to the state’s median income.
- If it is lower, then you are able to file.
- If it is higher, then attention must turn to your “disposable income”, or the amount left over after permitted expenses are deducted from your income.
- If the amount that remains is sufficient to make a reasonable payment toward your debts, then you may not be allowed to file, unless your debt load is significant.
- If the amount that remains does not meet the established threshold, then you will be permitted to file
Contact Us
If you think that bankruptcy may be the right choice for you, we can help you to evaluate the situation. Contact the Boca Raton bankruptcy attorneys of Eric N. Klein & Associates, P.A., at 561-353-2800.
