Bankruptcy Fact Book: The Means Test

Overview

If you are in need of a solution to your debt and feel you have nowhere else to turn, filing for bankruptcy may be your best option. Despite it’s negative social stigma, seeking debt relief with a Bronx bankruptcy attorney can help you turn the page on your debt and start fresh.

One of the most important aspects of the bankruptcy claims procedure is determining your eligibility for Chapter 7 debt liquidation. This is often preferable to Chapter 13 restructuring because it is a relatively quick process that allows you to rid yourself of your debt and repay your creditors swiftly. By liquidating non-essential assets, you are able to eliminate the seemingly insurmountable debt facing you in one fell swoop. In order to qualify for Chapter 7, however, you must take the ‘ means test’.

Means Test Specifics

The means test was created in 2005 when a law was passed to prevent debtors from filing for debt liquidation when they have the means to pay the debt through Chapter 13 instead. The courts needed a way to decide if a claimant was eligible or not. This resulted in the creation of the ‘means test’.

In this two-part procedure, the court first examines your average income over the previous 6 months. This is then compared to the median income in New York. If your income is less than the median, you pass the test and are allowed to file for Chapter 7. If your income is above the median, however, you must take the second portion of the test, wherein the court closely examines your income and expenses to decide if you could resolve your debt issues via Chapter 13. If not, you will be allowed to claim Chapter 7 protection.

A Reliable Bankruptcy Lawyer

Do you need debt relief? Are you interested in ending creditor harassment and getting your life back on track? You need the help of a skilled Bronx bankruptcy attorney from Bronson Law Offices. With more than 25 years of legal experience, the team at Bronson can help you end your debt problems and secure a brighter future.

Please, do not hesitate to contact a Bronx bankruptcy lawyer today!