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Understanding the Chapter 7 means test

If you are struggling with debt, know that you are not the only one in Roswell dealing with this issue. Many of those that we here at the Sanders Law Firm have worked with in the past are in your same situation: hard-working people that have seen various life events leaving them facing inordinate expenses. Oftentimes, your debt dilemma can become so great that fixing it on your own is no longer a realistic option. In such a case, a personal bankruptcy may be your best chance at reclaiming a healthy financial outlook. 

Yet bankruptcy is a privilege that is not afforded to all. It is designed to help those with realistic financial struggles, not people who simply do not want to pay their bills. A Chapter 7 bankruptcy does indeed allow certain debts to be discharged, but only if you qualify for it. You can you know if you qualify? Through the Chapter 7 means test. 

According to the United States Court's website, the first step in determining your eligibility for a Chapter 7 bankruptcy is to compare your current monthly income to the median for your particular demographic group in your state. If it is less than the median, you automatically qualify. If not, then you have to apply the means test. Your current monthly income (minus certain allowed expenses) is aggregated into an estimated total over a five-year period. If that total is greater than either $12,850 or 25 percent of the total amount of your nonpriority unsecured debt, you cannot qualify for a Chapter 7 bankruptcy. All is not lost, however; you could still qualify under Chapter 13. 

You can discover more information about your personal bankruptcy options by continuing to explore our site. 

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