South Atlanta Bankruptcy Blog

If you are one of the millions of Americans struggling with insurmountable debt and financial stability, then you have come to the right place for help. South Atlanta Bankruptcy's attorneys Gina Karrh and H. Brooks Cotten will be using this blog to provide information about bankruptcy. Don't hesitate to call us TODAY!

  • Home
    Home This is where you can find all the blog posts throughout the site.
  • Categories
    Categories Displays a list of categories from this blog.
  • Tags
    Tags Displays a list of tags that have been used in the blog.
  • Bloggers
    Bloggers Search for your favorite blogger from this site.
  • Team Blogs
    Team Blogs Find your favorite team blogs here.
  • Login
    Login Login form
Subscribe to this list via RSS Blog posts tagged in Means Test

What is the "Means Test" in Chapter 7?

Posted by on in Chapter 7

The “means test” is a formula enacted into the Bankruptcy Code in 2005. Congress decided that too many Debtors were “abusing” the bankruptcy process by discharging debt that they really could afford to repay.

The “means test” was added to the bankruptcy statute to provide an “objective” method for the Bankruptcy Court to determine which Debtors can repay their unsecured debt (at least in part) in a Chapter 13 case. If a Debtor fails the means test, his Chapter 7 bankruptcy case is presumed to be abusive, and the United States Trustee will seek to have that case dismissed or converted to another Chapter under the Code. Debtors who fail the test would be required either to convert their case to a case under Chapter 13, or pursue non-bankruptcy options.

The way the test works is that all of the gross income coming into the “household” during the six months before the case is filed is added together. Any changes during that period, such as being unemployed, are not generally considered. All income is taken into account, including bonuses, personal injury awards, and the like.

...
Continue reading
Hits: 3692
0

Contact us

If you want more information, fill in this form. We will get back to you as soon as possible.

captcha