The Chapter 7 Bankruptcy Means Test
Some people who are interested in filing for bankruptcy prefer Chapter 7 to Chapter 13 because of its simplicity and relative quickness. However, not everyone is qualified to file under Chapter 7. If the courts determine that you have enough income to repay your debts under Chapter 13, you may be required to do so. One tool the courts use to make this decision is called the means test.
If you are concerned about your eligibility to file for any kind of bankruptcy, the Harmon Law Office, LLC is here to help. Our knowledgeable Arizona bankruptcy attorneys can make sure you complete each step correctly, avoiding costly complications. Call our offices today at 480-829-0494.
The Means Tests: Step by Step
The first part of the means test concerns your average monthly income over the last six months prior to filing for bankruptcy. You will need to determine whether your monthly income is more or less than the average income in your area. If you are earning less than the average person in a home your size in your area, you qualify for Chapter 7 bankruptcy.
If your income is at or above the average, you may still qualify. Step two of the means test involves a formula that subtracts your regular expenses from your income. Your “regular expenses” will be based on the average cost of certain necessities – your home, food, transportation, etc – in your area. If you do not have enough income to cover both your debts and your necessities, you qualify for Chapter 7.
There are many different online calculators that claim to calculate the means test for you; unfortunately, some are more reliable than others. Our experienced Arizona Chapter 7 bankruptcy lawyers can provide reliable information and resources that will help you determine your eligibility.
Contact Us
Determining whether you qualify for a Chapter 7 bankruptcy can be complex, and it is only the first step in the bankruptcy process. For the support and guidance you need to get out of debt, contact an Arizona Chapter 7 means test attorney from the Harmon Law Office, LLC at 480-829-0494.