What is the Bankruptcy Means Test?

Do you qualify for bankruptcy?  Find Out!  Take the means test.

Not every individual or business who wishes to file bankruptcy is eligible to file for chapter 7 bankruptcy.  Some people who are having financial difficulty either make too much income to file for chapter 7 bankruptcy or have property that they wish to maintain.  In order to figure who qualifies, a bankruptcy means test was created in 2005.  A debtor must pass the “means test” to file for Chapter 7 bankruptcy protection.  The means test is an objective standard of measuring whether a debtor can discharge all eligible debt under Chapter 7 bankruptcy, or whether the debtor can repay creditors in a Chapter 13 repayment plan.

In order to determine if bankruptcy is the best solution for you or can help you through an overwhelming financial situation, an attorney from My Arizona Lawyers, PLLC will help you take the bankruptcy means test.  The “means test” determines whether you have low enough income to file for Bankruptcy under Chapter 7 of the bankruptcy code.  Chapter 7 bankruptcy extinguishes most, if not all of your debt.  The means test was designed to keep high wage earners from wiping out their debts when they could conceivably pay them.

Means Test Qualification Process

The means test is a quick qualification process that helps a debtor determine which chapter of bankruptcy they can legally qualify for, and essentially which will be the most beneficial for their situation.  The means test is conducted as follows:

• If a debtor falls below the median income for the state of Arizona, they will be considered unable to pay back their debt in a reasonable amount of time and therefore the debtor qualifies for a chapter 7 bankruptcy in Arizona.

• If a debtor makes more than the median income for the state of Arizona, they will not be eligible to file for Chapter 7 bankruptcy in Arizona.  This debtor will have other options, including filing for chapter 13 bankruptcy in Arizona.

Accessing Your Situation

By quickly assessing your situation, you may determine whether Chapter 7 or Chapter 13 bankruptcy would be better for you in your current financial situation.  However, before you file your bankruptcy petition, talk to a Tucson bankruptcy attorney to understand the legal ramifications and obligations of bankruptcy, and if an alternative would be a more viable option for you.  Our Tucson debt relief experts are well-versed in chapter 7 bankruptcy, chapter 13 bankruptcy, and many of the alternatives to bankruptcy.

Contact our Tucson area bankruptcy law office to discuss any questions you may have regarding the bankruptcy means test.  At a free bankruptcy consultation our dedicated Tucson bankruptcy lawyers will administer the means test and determine which chapter of bankruptcy you qualify.  We will also work with you to determine the best debt relief option for you and your family.  We look forward to hearing from you.