What Is The Means Test?
When you file for bankruptcy, there are some important steps that must be completed before the court will consider your case. You will need to compile and submit a list of all your assets and debts, and you will also need to complete a series of financial forms.
The Means Test
The means test is a test that the court requires you to complete to determine if you are eligible for Chapter 7 bankruptcy. The means test form is a six-page document that requires you to answer a series of questions about your income and expenses. In addition to the court-required means test form, you will also need to complete a creditors statement of your secured debts, and a statement of monthly net income and expenses with your current monthly income after taxes and deductions. If you are filing a joint bankruptcy, you will need to complete a form for each of you, as well as a statement of your net family income. The means test form is a necessary part of your bankruptcy filing, but if you are self-employed or have irregular income, it may be difficult to complete.
In determining disposable monthly income, the means test does not normally take into account the debtor’s expenses for the payment of debt-related attorney’s fees and court fees. The debtor’s disposable income is then compared with the median income for a family of the same size in the debtor’s state and county. If the debtor’s monthly disposable income is more than the applicable median income for a family of the same size, the debtor is considered to have “means” to pay some or all of the debts under a Chapter 13 repayment plan.
If you are considering bankruptcy or have questions about eligibility to file for bankruptcy, contact your Sacramento bankruptcy lawyer today.