Rudimentary Facts About Chapter 7 Means Test

Apr 9th, 2014 | By | Category: Legal

As a result of abuses in the bankruptcy system, Congress passed the’ Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. ‘ The purpose of this Congressional enactment was the inclusion of a ‘means test’ designed to prevent higher income earners from filing Chapter 7 bankruptcy.

In the context of a Chapter 7 bankruptcy, the ‘means test’ acts in the same manner as that proposed in the present dialogue surrounding social security reform. The bankruptcy ‘means test’ determines whether an individual’s monthly income is too high qualify for a Chapter 7 bankruptcy.


The means test is another element introduced by the 2005 rule change. Chapter 7 bankruptcy requirements now include taking the means test, a way of determining a debtor’s ability to pay. If your disposable income ’your monthly income after basic necessities are paid for ’is less than your state’s median, you can file under Chapter 7. Otherwise, you’re deemed capable of making partial payments and can not file for Chapter 13 bankruptcy. Your bankruptcy attorney can help administer the means test and determine which chapter you qualify for.

If you’re suffering under the burden of negative equity, you should consult with an experienced bankruptcy attorney in your area to find out if you qualify for a Chapter 7 bankruptcy.


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