One of the challenges in deciding to file bankruptcy and choosing which law firm to represent you is the Means Test.

You may have been researching bankruptcy and have come across the “Means Test”. What is the Means Test? The means test is the method of deciding if you can file a chapter 7 vs a chapter 13. For most individuals, chapter 7 is cheaper, faster and provides more relief than a chapter 13. There are exceptions that make chapter 13 a better choice such as saving your property from foreclosure if you are behind, filing bankruptcy again sooner if you have filed in the past eight years and to prevent collections if you make too much money.

What is too much money? The US Department of Justice calculates the Means Test. Basically, if you make more than the average household size, they want you to go into a chapter 13 and pay some or all of the money back instead of wiping it all out in a chapter 7. https://www.justice.gov/ust/means-testing This is the link to the raw data used to determine which options apply to you. It can be very confusing as there are many factors involved in determining your results. First, know that making more than the average income for a household of your size is not the end. About 20-30 % of our clients who file chapter 7 make more than the average household. That is just the beginning. Once we determine how much you make, then we look at how much you spend. If, after running all of the calculations and you do not have extra money (called disposable monthly income) at the end of the month, you can still file a chapter 7.

Most attorneys expect you to hire them before they will tell you what you are eligible for. We are happy to run your numbers so you know what to expect and make informed choices based on the rules and your exact situation. We provide this as a free service to those looking at their options so they may know with confidence what will happen when they file bankruptcy. We can not provide this to individuals who have already retained another law firm as this is a legal determination and we can not provide legal assistance to represented parties. Please call today for your free Means Test Calculation.