THE BANKRUPTCY MEANS TEST: Is your Income Low Enough for Chapter 7 Bankruptcy?

Thu, Sep 23, 2010

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A bankruptcy means test calculator can determine whether you qualify for Chapter 7 Bankruptcy. The means test is a formula designed for filers with primarily consumer debts (not business debts). The criteria limits use of Chapter 7 bankruptcy to those who can’t truly pay their debts.

You don’t have to be destitute to take the means test. You may earn good monthly income but still qualify for Chapter 7 bankruptcy because you may have a lot of expenses, such as mortgage payments

How the Chapter 7 Means Test Works

It does this by deducting specific monthly expenses from “current monthly income” (average income over the six calendar months before you filed for bankruptcy) to arrive at “monthly disposable income”. If you have higher disposable income, more than likely you won’t qualify for Chapter 7.

Every state has its median income levels that vary according to household size, allowable expense amounts for basic necessities, housing and transportation. You need not worry about computation.

High income filers who fail the means test may use Chapter 13 Bankruptcy to repay a portion of their debts.

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Colorado Bankruptcy Law Group, LLC is a personal bankruptcy firm serving clients in the greater Denver area. You can make an appointment by calling 303.341.3403 or clicking the link below.

If you are considering Chapter 7 or Chapter 13 personal bankruptcy, schedule your free, confidential consultation today. Our online scheduling system allows you to schedule a free consultation at a time that is convenient for you.

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Related posts:

  1. Failure to Disclose Assets Lands Chapter 7 Debtor in Prison
  2. Supreme Court Issues Important Ruling About Chapter 13
  3. Am I Eligible to File Bankruptcy?
  4. Chapter 7: Means Test, Credit Counseling, and Debtor Education Information
  5. Chapter 7 Bankruptcy: Who Can File?
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This post was written by:

Peter Mullison - Denver Colorado Bankruptcy Attorney - who has written 228 posts on Denver Colorado Bankruptcy Attorney – Chapter 7 & 13 Lawyers.

Peter Mullison is a Denver, Colorado bankruptcy attorney.

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