Understanding the Bankruptcy Means Test for Chapter 7 Filing
Introduction to the Bankruptcy Means Test: The means test is an essential tool used in bankruptcy proceedings, particularly for Chapter 7 filings. It serves as a formula to evaluate whether an individual should proceed with a Chapter 7 liquidation or if their debts are better managed through a Chapter 13 repayment plan. This test is crucial in determining the appropriateness of a Chapter 7 bankruptcy filing.
Working of the Means Test: The test begins by comparing the debtor’s current monthly income to the median income of their state. If the debtor’s income exceeds the state’s median, the means test is applied under the Bankruptcy Code to assess if a Chapter 7 filing is considered presumptively abusive. The assessment takes into account various factors, including your expenses, income, and debt obligations.
Consequences of the Means Test: If the filing is determined to be presumptively abusive, and this finding is not successfully contested, the bankruptcy case may either be converted to a Chapter 13 bankruptcy or dismissed. Understanding the intricacies of this process is crucial for anyone considering bankruptcy, as it directly influences the course of your financial recovery journey.
Experienced Guidance from Friscia & Associates: Navigating the complexities of the bankruptcy means test can be challenging. At Friscia & Associates, our experienced bankruptcy attorneys provide insightful guidance and support. We assess your financial situation in detail to determine the most appropriate bankruptcy chapter for you, ensuring your decision aligns with your financial goals.
Need Assistance with Your Bankruptcy Filing?: If you are considering a Chapter 7 Bankruptcy or have questions about the means test, contact us at (973) 500-8024 or (212) 960-8308. You can also submit your contact information here for a direct consultation. Our team is dedicated to providing you with the advice and assistance you need for a successful bankruptcy process.