Are you eligible for Chapter 7 bankruptcy?
Chapter 7 bankruptcy allows you to discharge most — if not all — of your loans and achieve a financial blank slate. In order to qualify for Chapter 7 bankruptcy, however, you must first pass the qualifying means test. This test was established by Congress in order to prevent people with the financial capability to repay their debt from filing for liquidation bankruptcy.
Before October 17, 2005, whether an individual could file was up to the individual discretion of the bankruptcy judge. The means test examines an individual’s disposable income in order to determine whether or not they are truly in need of this form of debt relief.
What is on the means test?
The first section of the means test will ask you what your monthly income is. You will need to input all forms of income you have received for the last six months — including wages, tips, bonuses, rental income, unemployment compensation, retirement income, child support, alimony payments, workers’ compensation, and disability insurance.
Our monthly income will be counted as the average of your monthly income over the last six months. If your income is too high, you will not pass the means test. If your income is equal to or is below the state median, then you will automatically qualify for Chapter 7 bankruptcy. If, after subtracting all qualified expenses, your disposable income is too low, you will be able to qualify for Chapter 7 bankruptcy.
Strong Legal Support in the San Fernando Valley
If you are facing overwhelming debt and are unsure of where to turn, don’t hesitate to call a bankruptcy attorney at Merritt & Hagen, APC. We have helped thousands of people successfully file for bankruptcy since our firm opened more than 25 years ago. Why hesitate to receive the compassionate counsel and informed advocacy you need? Call our Woodland Hills bankruptcy law firm today to schedule your case evaluation with a legal professional who can discuss your particular situation and help you find the light at the end of the tunnel.
