Bankruptcy Law - Chapter 7 Means Test - Qualifications For

Bankruptcy Law - Chapter 7 Means Test - Qualifications For Eligibility

Bankruptcy law compels debtors to pass the means test to be suitable for a chapter 7 bankruptcy. The

obligation of the means test allows bankruptcy courts to reserve chapter 7 filings for the most qualified applicants. The means test is a very intricate process with many nuances which cannot be ignored. This article will only outline some of the general steps in the means test and is not a full description of the process. A debtor should consult a somekeyword for assistance with determining eligibility for chapter 7 bankruptcy.


Normally, the first step a Tampa bankruptcy lawyer will take in determining a client's eligibility is calculating the client's average

income for the most recent 6 months. If the average income is below the State's median income the debtor will typically qualify for chapter 7 bankruptcy. However, if the client's income is exceeds the State's median income additional calculations will be necessary to determine eligibility.

If the client's income is above the State's median income the Tampa bankruptcy attorney should calculate the client's disposable income as the next step in the means test. The disposable income is calculated by subtracting allowable expenses from the client's six month average income. The Tampa bankruptcy lawyer will then multiply that amount by 60 to predict the total disposable income for the next five years. If the estimated five year disposable income exceeds the State's median income by $10,000 the client will typically not be eligible for a chapter 7 bankruptcy.

Even if the client passes the first stage of the means test he may still be ineligible for chapter 7 bankruptcy due to any

number of reasons. For instance, if the client's disposable income exceeds 25% of the total amount of unsecured debt the debtor will be ineligible for chapter 7 bankruptcy.

If you are considering filing for chapter 7 bankruptcy and have questions you can call Florida Law Group for help. An well-informed somekeyword will answer all of your bankruptcy questions in a free and confidential consultation.