If you have considered filing for personal bankruptcy, you may have heard about the Means Test. This test determines whether you must file for Chapter 7 or Chapter 13 bankruptcy. It takes into account income, expenses, and financial obligations to help ensure that bankruptcy relief is directed toward those who truly need it.
To help you prepare for your bankruptcy journey, let’s dive further into what you can expect from the Means Test.
What Is the Bankruptcy Means Test?
To help prevent fraudulency and abuse of Chapter 7 bankruptcy by higher-income individuals, the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was introduced in 2005. The test helps prevent this by comparing your income to your state’s median income and considering your essential living expenses to determine your disposable income.
What to Expect from the Means Test
Preparation is key in many facets of life, especially when it comes to … Read more