The means test is a tool that is used to determine whether or not an individual qualifies for Chapter 7 bankruptcy based on their monthly income. This test was designed to prevent people with the means to repay their debts from qualifying for Chapter 7 bankruptcy. As a result, the test ensures that Chapter 7 bankruptcy is only available to those who truly need it.
If you are thinking about filing for Chapter 7, it's important to understand how the means test works and whether or not you pass it. To find out if you qualify, schedule a free consultation with the experienced bankruptcy means test attorneys at Hammond Law Firm.
There are two main steps in the means test:
Your eligibility for Chapter 7 bankruptcy will hinge primarily on your income. This is why it's so important to know what types of income you should include when calculating your monthly income for the means test.
The monthly income you will use to perform the means test is calculated by taking an average of the income you have earned over the six months prior to filing for bankruptcy. To calculate this average, add up all of the income you have earned during this six-month period and then divide the total by six to find the average.
Most types of income that you earned during this six-month period must be added, including:
Most individuals will need to pass the means test to qualify for Chapter 7, but there are some exceptions to this rule. These exceptions include:
Determining Chapter 7 eligibility using the means test is not as straightforward as it seems. For this reason, let an experienced bankruptcy attorney in Oklahoma City review your finances and determine if you qualify. Contact the team at Hammond Law Firm today to learn more about your options. To schedule a free consultation, call our law office at 405-216-0007 or submit your information via the form on this website.