Phoenix Bankruptcy Lawyers: Means Test

At Platt & Westby, P.C., our Phoenix bankruptcy attorneys have been helping people with all aspects of bankruptcy since 1973. We work closely with clients to explain bankruptcy requirements, such as the bankruptcy means test, and help them determine the debt relief option that can give them the fresh start they need.

To schedule a free initial consultation, call our law office in Phoenix, Arizona, at 623-239-4422.

What Is the Bankruptcy Means Test?

The bankruptcy means test was created in 2005 as a way to standardize the qualifications for Chapter 7 bankruptcy. The name is deceiving because it is not actually a test, but rather a form to evaluate an individual or family's income compared to the state's median family income. Those people who fall below the median typically will qualify to file Chapter 7 bankruptcy, while those above the median may be better served by filing Chapter 13.

How Does the Means Test Work?

The means test has two parts. The first part evaluates a debtor's income compared to the state's median family income. Everything from wages, to child and spousal support, to disability income are considered in the calculation. If a debtor makes more than the median income, he or she completes the second part of the bankruptcy means test. This part takes into consideration the debtor's expenses to determine whether the debtor brings in enough income to offset the expense of a Chapter 13 repayment plan. If not, then the debtor will qualify for Chapter 7 bankruptcy.

Does the Bankruptcy Means Test Make It Harder to Qualify for Chapter 7?

It is a common misperception that the bankruptcy means test makes it harder to qualify for Chapter 7 bankruptcy. Many people who would have qualified for Chapter 7 prior to the introduction of the means test will still qualify. The means test only provides a standard formula for determining qualification rather than leaving it up to the discretion of the bankruptcy judge.

Contact Our Chapter 7 Attorneys

To learn more about the bankruptcy means test and your debt relief options, contact our Phoenix law firm to arrange a free consultation with an experienced bankruptcy lawyer.

We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. The information contained in this message is general and should not substitute for the advice and counsel of an experienced bankruptcy attorney.

Bankruptcy costs are one of the best bargains in law, starting with a $750 retainer. The fixed fee of a case will be discussed in a free case evaluation conference.