Means Test

The Means Test is the first step in determining eligibility for filing Chapter 7 Bankruptcy under the United States Bankruptcy Code. Sometimes called a median income comparison, the Means Test compares your income to the median income in your state (Florida) for a family that is the same size as yours. If your household income is higher than your state's average, it does not mean that you cannot file Chapter 7, it simply tells your bankruptcy lawyer that you will need to satisfy the requirements for Step Two of the Means Test.

The second step of the Means Test compares your disposable income to your unsecured debts. The Internal Revenue Service (IRS) provides a guideline of allowable expenses that are deducted from your income to determine your disposable income. Your bankruptcy attorney can explain how the calculation of disposable income for the next five years is used to determine whether any significant repayment of your creditors is possible. If your disposable income is less than the prescribed amount, you will likely pass the Means Test.

Chapter 7 Means Test

If you pass Step One or Step Two of the Means Test, your bankruptcy lawyer will explain the advantages of filing for debt protection under Chapter 7. Means Test scores that fall in the gray area, where your projected disposable income over the next five years is higher than the average for a same-size family in Florida but less than the prescribed percentage of your unsecured non-priority debts, will likely qualify you to file for a Chapter 7 Bankruptcy. If not, your bankruptcy attorney can address your options which might include filing a Chapter 13 Bankruptcy for the reorganization of your debt.

Bankruptcy Means Test

Our Bankruptcy Lawyers can help you put an end to creditor harassment, threats of foreclosure or repossession, judgments, bank account and wage garnishments. At the Law Offices of Keith D. Collier, we provide a FREE bankruptcy consultation to review your income and expenses, and provide you with the best debt relief options based on the results of your Chapter 7 Means Test. If you're drowning in debt and need a fresh financial start, call a bankruptcy lawyer today in Jacksonville at 904-696-DEBT (3328), in Orlando at 407-851-HELP (4357) or in Daytona Beach at 386-252-DEBT (3328).