What is a Bankruptcy Means Test?

The Bankruptcy Means Test is a calculation used by the court to determine if you have extra disposable income each month to pay some of your debts. If you make above a certain income limit, your attorney will deduct certain expenses from your income. If your income varies, your attorney will be able to calculate your current monthly income if your provide them with 6 months of paystubs. They will also determine which state’s exemptions you will use. If your attorney finds your income to be above your applicable state’s income level, they can assess your means by deducting reasonable expenses from your income to prove that you don’t have enough money left to pay debts.

If you don’t pass this test, you will be disqualified from filing a Chapter 7 bankruptcy. A Chapter 13 bankruptcy is a 3 to 5 year repayment of some of your debts, which is available for those who don’t qualify for a Chapter 7 bankruptcy.