Does Chapter 13 also have a means test?

The first step in filing for a consumer bankruptcy is generally the means test. Chapter 13 bankruptcy is required if your income is high enough to feasibly come up with a debt repayment plan to pay off your debts in 3-5 years.

Formally speaking, Chapter 13 bankruptcy does not have a means test but your income must be high enough to successfully carry out a repayment plan. The repayment plan also has to be approved by the court or the Chapter 13 bankruptcy is not going to happen.

The purpose of a Chapter 13 bankruptcy is to be able to keep your property and help yourself out of a temporary financial setback. Chapter 13 is designed for people who are having problems now but will have more money after the bankruptcy ends and be able to repay their debts or live within a proposed budget. Chapter 13 traditionally also allowed for homeowners to preserve the equity in their homes.

Chapter 13 bankruptcy is not cheap since a trustee's fee and a portion of legal fees have to be paid before the bankruptcy can begin. If your debt is higher than the limits in a Chapter 13 bankruptcy and you have the money to pay for a Chapter 13, you may want to consider filing for Chapter 11 bankruptcy.  Chapter 11 is more common with businesses but individuals can use it as well.

If you can not afford a Chapter 13 bankruptcy, you should file under Chapter 7.