What is the means test in bankruptcy? This is a common question asked of bankruptcy attorneys throughout the country. The means test in bankruptcy is used to determine what Chapter of bankruptcy case you are able to file. The means test takes into account your average gross income( income from any source before taxes are taken out) in the six months prior to your bankruptcy case being filed in the court. If your income is too high, it could mean you will have to file a Chapter 13 bankruptcy case rather than a Chapter 7 bankruptcy case. A Chapter 13 bankruptcy case is a case where you will make monthly plan payments to a Chapter 13 trustee for the length of a Chapter 13 plan. The length of the plan can go up to five years. A Chapter 7 bankruptcy case is a much quicker type of bankruptcy case where in most cases no payments are made to a trustee. Just because you made more than the average gross for your area in the preceding six months before you file your bankruptcy case does not necessarily mean you will not be able to file a Chapter 7 bankruptcy case. The means test takes other factors into consideration. The number of people who reside in your home is a key factor. The means test also permits you to deduct certain expenses in the means test calculation. This is why it is so important to consult with an experienced bankruptcy attorney. You need to be certain not only what chapter of bankruptcy you are eligible to file, but what chapter of bankruptcy is best for you to file. You want to make certain that your assets are protected. You also want to make certain you get the bankruptcy discharge that will rid of you the debts you entitled to be rid of. Do not be afraid of the means test in bankruptcy. A bankruptcy lawyer can guide you.
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