Learn About the Means Test
Learn About the Means Test
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Bankruptcy Chapter 7 Means Test
If you want to file for Chapter 7 bankruptcy, you must pass the means test. The means test looks at your income, and perhaps your expenses and debts, to determine whether you could afford to pay back at least some of your debts. If so, you might not you won't be allowed to use Chapter 7; instead, you could will have to use Chapter 13 if you want to file for bankruptcy.
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What Is Current Monthly Income for the Means Test?
Congress created the “means test” to determine if you qualify to file for Chapter 7 bankruptcy. Whether you qualify for Chapter 7 depends largely on what the means test calculates as your “current monthly income.”
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What to Do If You Fail the Chapter 7 Bankruptcy Means Test
In order to qualify for Chapter 7 bankruptcy relief, you must pass something called the means test. The means test looks at your income and expenses to determine if you can repay a certain portion of your unsecured debts to your creditors. If you can, then you don't qualify for Chapter 7 bankruptcy.
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Can I File for Chapter 7 Bankruptcy If I Am Unemployed?
There is no bar to filing for bankruptcy if you are unemployed. Like all Chapter 7 bankruptcy filers, you'll have to pass the means test in order to file for Chapter 7. The lower your income, the easier it is to pass.