Means Test for Chapter 7 bankruptcy
What is the bankruptcy means test?
The bankruptcy means test is a document about 2-15 pages. It’s a long form that is the gatekeeper to Chapter 7 bankruptcy. It looks at two things. Firstly, do you earn less than the magic number. Secondly, if you earn more than this number, are there enough legitimate takeaways where it’s fair for you to do Chapter 7.
Do you have a bankruptcy means test calculator?
That’s smoke-and-mirrors mumbo-jumbo. A bankruptcy means test calculator is this: count up your recent income and compare it against a government website.
And that’s it?
No, that’s not really it. But that’s what these magic websites are doing. You can do that yourself. Beware: you can earn less than the number and still not qualify for Chapter 7. And, you can earn more than the number and still be eligible for Chapter 7.
What if my income is above the magic number?
If your earnings are over the state median income for Chapter 7, it’s possible you can still be eligible. There are some opportunities to subtract some, not all, of your expenses. You’ll want an experienced Antelope Valley bankruptcy lawyer to help you with this.
What if the means test says there’s a presumption of abuse after I enter all the expenses?
The presumption is bad. Because it means Presumption of Abuse. This means you don’t qualify for Chapter 7 bankruptcy. Sure, you can file it as a Chapter 7, but calling a grapefruit a horse saddle doesn’t make it purple. And calling a case that isn’t one a “Chapter 7” doesn’t make it one and it won’t get kicked out.
So I can’t file bankruptcy?
Sure you can. If you don’t pass the means test, you’re still likely eligible for bankruptcy, just maybe not Chapter 7. There are other options, one of them being Chapter 13 bankruptcy. Chapter 13 is where you pay some or all of your debt, based upon your ability and best efforts. Be assured: if I can make your case a Chapter 7 bankruptcy using the federal guidelines, I will do all in my power to make it so. I’ve completed thousands of these long forms, and am familiar with the ins and outs of the means test.