I Need to Pass a Means Test to File Chapter 7 Bankruptcy. What Does That Mean?

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In order to be eligible for Chapter 7 bankruptcy, you are required to pass a means test…

In order to be eligible for Chapter 7 bankruptcy, you are required to pass a means test ultimately to restrict the number of people who are looking to have their debt forgiven.  Simply stated, it is not hard to pass the means test, but there are certain requirements. 

With the means test, they will be looking at your income, your expenses and the size of family.  If your family’s income is below your state’s median income and your disposable income is low enough (disposable income is what is left after your allowable expenses (rent, clothes, utilities, groceries, etc. are paid), your chances are pretty good for passing the means test.

If you don’t pass the means test you have other options.  You can retake it again in another  six months, if you think your financials have changed, without any penalty. Or, you can consider filing for Chapter 13.