What is the Means Test For?

In order to file for Chapter 13 or Chapter 7 bankruptcy in the United States, individuals must take the means test.  This means test clause, which was enacted as part of the Bankruptcy Abuse Prevention and Consumer Protection Act, seeks to ensure parties filing bankruptcy are actually viable candidates.  The means test assesses whether an individual’s income level, versus outstanding debts and current expenses actually qualifies the individual for relief under Chapter 7 or Chapter 13.  This is especially true for candidates seeking Chapter 7 eligibility, where debts may be discharged in some cases.

How to Obtain Chapter 7 Eligibility

In order to be approved for Chapter 7, individuals must show that their case presents a situation where Chapter 13 repayment or reorganization is not a feasible alternative, such as if they have too much income for chapter 7.  After they take the means test, which is submitted to bankruptcy courts, as well as undergo credit counseling from an approved outside agency, individuals may be allowed to proceed to file for chapter 7 and be granted a Chapter 7 discharge.

What If I Have Filed for Bankruptcy in the Last 6 Years?

Bankruptcy filings made consecutively in six year period used to be allowed under federal bankruptcy codes for Chapter 7, however, if you have filed for bankruptcy in the last 6 years, you are no longer eligible for Chapter 7 relief.  The mandatory time periods between Chapter 7 filings for one individual is now set at eight years.

Getting Legal Help from a Bankruptcy Attorney

A bankruptcy attorney can assist individuals from the onset of the bankruptcy process.  For starters, many individuals have credit collection agencies taking action against the individual, including wage garnishments.  By filing, an individual can at least temporarily cease collections actions and wage garnishments, and in turn, use the bankruptcy filing to schedule discharge of debts, or arrange negotiated settlements with creditors or setup repayment plans.