Means Test
Helping people file for Chapter 7 and Chapter 13 Bankruptcy
Before people can move forward with filing for Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, they will have to take a means test, which will determine their eligibility. The means test takes into consideration the average income people have made in the 6 months prior to their bankruptcy filing. Peoples’ average income is then compared to the state’s median income. All people must take the means test as it is a federal requirement for filing a bankruptcy petition in the United States.
In cases where peoples’ six month average income is lower than the state’s median income, they will be granted permission to file for Chapter 7 Bankruptcy. It is assumed that the person would not be able to repay debts they owe creditors, which would exclude them from filing for Chapter 13.
However, in cases where peoples’ average six month income exceeds the state’s median income, people would be denied permission to file for Chapter 7 Bankruptcy. Their only alternative would be to file for Chapter 13 Bankruptcy as it is assumed that the person has sufficient income to repay creditors over the span of 3 to 5 years.
Many people are unfamiliar with the conditions and laws surrounding the means test. For this reason, anytime people are considering filing for Chapter 7 or Chapter 13 Bankruptcy, it is in their best interest to speak with a bankruptcy lawyer who is familiar with the state’s means test. By reviewing the terms of the means test, people will remain informed and in cases where they may be ineligible for bankruptcy, they may consider more appropriate alternatives, such as debt consolidation, debt settlement, loan modifications or debt counseling.
Las Vegas Bankruptcy Lawyers
At The Las Vegas Bankruptcy Law Firm we will do everything we can to provide you with personal attention throughout the bankruptcy process. Contact us today to learn how our Las Vegas bankruptcy lawyers can make a positive difference in your case!
The Las Vegas Bankruptcy Law Firm represents individuals who wish to file for bankruptcy in Las Vegas, Nevada.