Chapter 7 Bankruptcy and The Means Test

It is necessary to pass the bankruptcy means test in order to successfully file for Chapter 7 bankruptcy. At Todd Cushner & Associates, our bankruptcy litigation experts can navigate you through the testing process so that you can clear your debts through bankruptcy.

What Is the Means Test?

The means test is essentially an evaluation which helps determine if you have enough disposable income to pay off your debts. The means test mainly requires data consisting of your income, expenses, and information such as the number of family members in your household.

There are two primary aspects of the means test; the first evaluates where your household income stands compared to New York State’s median household income level. This evaluation is based on data provided from the six months previous to the date the means test is taken, however it can take recent or pending changes to your income into account and make the correlating adjustments for a fair evaluation. The second aspect of the means test tallies up what are usually referred to as allowable expenses. Allowable expenses include the costs of things such as groceries, clothing, rent payments, car payments, medical expenses, and other necessities. After these expenses are calculated, the remaining money is classified as disposable income. The standards pertaining to allowable expenses are set by the IRS and differentiate on both national and local levels. It is imperative that your expenses are properly calculated in order to prevent your bankruptcy filing from being denied.

At Todd Cushner & Associates, we will work with you every step of the way to ensure everything is correctly documented and accounted for.

calculating expenses on paper by laptop
hand holding cash coming up through cement

What Happens if I Pass the Bankruptcy Means Test?

Passing the bankruptcy means test enables you to move forward on filing for Chapter 7 bankruptcy. And successfully filing for Chapter 7 bankruptcy can provide you with the financial fresh start you deserve. In Chapter 7 bankruptcy, almost all of your unsecured debts will be forgiven; this includes debts such as credit card payments, medical expenses, and other debts that have been causing you to struggle financially.

What Happens if I Fail the Bankruptcy Means Test?

Failing the bankruptcy means test prevents you from being eligible for Chapter 7 bankruptcy for the six months after taking the test. And six months is a long time when it pertains to your financial well-being which is why it is so important to have the right bankruptcy attorneys by your side. The bankruptcy lawyers at Todd Cushner & Associates have the knowledge and experience necessary to help you throughout this process, aiding you in achieving your desired results.

Did you recently take the bankruptcy means test without the help of an attorney and fail? If so, our team can still help you file for Chapter 13 bankruptcy, enabling you to receive quick debt relief without needing to wait another six months to retake the means test.

No matter what your situation, contact us today to schedule a free consultation so we can get you back on the road to financial stability as soon as possible.

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