Means Test

If there is a possibility that you can file chapter 7 bankruptcy, you are required to take a means test. A means test will determine how much money you have available to pay off your debts, and whether or not you fall in a low enough income range to declare chapter 7 bankruptcy.


The first step of the means test is to determine whether or not your income falls under the median income for your household size in your state. If it does, there is nothing further that you have to do for the means test. You automatically pass and can file for a chapter 7 bankruptcy. If your household income does exceed the median, it will be broken down into more complex calculations. Your allowed monthly expenses will be calculated and compared to your income to determine what disposable income you have left over, if any. If your disposable income exceeds the limits allowed by chapter 7 bankruptcy, you are not eligible for a chapter 7 and must instead file for a chapter 13 bankruptcy.


Even if you do pass the means test and can file for chapter 7 bankruptcy, that does not necessarily mean that would be the best option for you. A qualified bankruptcy attorney can not only assist you throughout the means testing process, but also provide you legal advice regarding which filing option is best for you and your family.


Call the Kalra Law Firm today to schedule an appointment to discuss how bankruptcy can help you start over financially and live the debt free life you’ve always wanted. (310) 325-9012.