Can You Qualify For Bankruptcy Under the Means Test?

Let's Find Out

If you are going to file for a Chapter 13 bankruptcy, you do not need to complete the means test.  However,  you, or with the assistance of your attorney, will have to complete a form almost identical to it — and that will determine how much you must pay in a Chapter 13 plan.  In my law office we always run it both ways to determine what is your best options. 

If you are considering  filing for a Chapter 7 bankruptcy, you have to complete it, no matter what the first part of the form to figure your "current monthly income" (CMI). This is  based on your average income over the past six calendar months. This  number will determine whether you must complete the rest of the form to determine if you quality.

If your CMI is below the median income for California or where you live, and based on your household size, then you do not need to complete the means test.  

If your CMI is higher than the median for California for a household your size, you must complete the means test to compute your monthly "disposable" income (that is, income minus expenses). The result of that computation will determine whether you are eligible for Chapter 7 bankruptcy.

I have found most people whose income is greater than the CMI probably will still qualify under the Means Test.  If not, there is Chapter that still might get the same results as a Chapter 7.  Sometimes a Chapter 13 will give you better results if you are behind on your mortgage payment and still want to keep your residence. 

When you retain my office to review your needs, I will also advise you of all of your options based on the information you provide.

  David A. Casey, Esq.

Eligible for Chapter 7 or Chapter 13?

Despite what you may have heard, the recent changes in the bankruptcy code doesn't affect most people who are going to file bankruptcy.  The reason is simple. Most people who need bankruptcy protection are the ones who qualify without any real problem.  Sure sometimes a long form has to be done but that does not disqualify you at all.  It only means more information is needed for the bankruptcy court to review.

Do you qualify?  My office has a  calculator that will help you find out. Based on your income and expenses, it will apply the calculations required by  Form 22A, the Chapter 7 Means Test form. (Form 22C, the Chapter 13 Statement of Current Monthly Income, which asks for the same information and a bit more facts.  My office will only charge a small fee for computing the numbers.  Then, if you retain my bankruptcy services, that fee is applied to the retainer. There are a lot of free ones available on the internet, however, I have seen far too many errors in some of them.  When you are dealing with the Federal Courts, or any court for that matter,  you must do it right!

The calculator uses your zip code to apply the regional income and expense standards and calculations required by the new "means test" that was a cornerstone of BAPCPA, the Bankruptcy Law (11 U.S.C. 707(b)).

I would not try to accomplish this on your own.  If you do, then make sure you read the instructions carefully. If you are unsure whether an item applies to your situation, make a note of your question. Ask about it during your consultation at my office.  

  David A. Casey, Attorney

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Bankruptcy Means Test, El Cajon CA Bankruptcy Attorney