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What is the Means Test?

The Means Test is a way for you to determine whether your current income level qualifies you for chapter 7 or chapter 13 bankruptcy. The government implemented the means test in 2005 to prevent wealthy people from being able to file for chapter 7 bankruptcy. Keep in mind that the result of the means test does not mean that filing for bankruptcy is your only option, you should contact a chapter 7 bankruptcy attorney in Gainesville to find out if you have any other options before filing for bankruptcy.

How does the Means Test work?

The means test is used to determine whether the difference in your current level of income and your current monthly expenses is at a level that you can afford to pay off your debts. The formula used in the means test takes your monthly income and subtracts your monthly expenses to find your disposable income. Your prior six months average income as well as any other earned income from a non-filing spouse or family member, gifts or assistance, and income from a family business is the income that will be used in the means test. The higher the disposable income that you report, the less likely that you are to qualify for chapter 7 bankruptcy and the more likely you are to qualify for chapter 13 bankruptcy.

There is a simple qualification that can skip the need to take the means test to determine your eligibility for a chapter 7 bankruptcy. If your income is lower than the median income in your state for a similar sized household than you automatically qualify for a chapter 7 bankruptcy.

What should you do after taking the means test?

The means test is designed to help you determine what chapter of bankruptcy you may qualify for. Taking the means test does not mean that you have to file for bankruptcy in Gainesville. It is a good idea to meet with an experienced Gainesville bankruptcy attorney to discuss your options to bankruptcy and whether you should file chapter 7 or chapter 13. There are other determining factors besides your income, and a bankruptcy lawyer in Gainesville can help you decide what is best for you. Set up a free consultation with an Gainesville bankruptcy lawyer at the Law Offices of Justin McMurray to discuss your options.

Gainesville Bankruptcy & Foreclosure Defense Attorney

The Law Offices of Justin McMurray, P.A.
2135 NW 40th Terrace, Suite C
Gainesville , FL , 32605
(888) 316-2131
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