Means Test

What will the means test tell you?

The means test is a two-step process that will determine whether you qualify for Chapter 7 or Chapter 13 bankruptcy. The first step is a median income comparison. A bankruptcy attorney will be able to help you calculate your yearly family income, and compare that to your median state income for a family of similar size. If you land above the median income level, you will complete step two, which calculates your unsecured debts and disposable income. This will determine how much, if any, disposable income you have available to pay back to your lenders. You can prepare for the means test by providing your attorney with your financial documents. Though the bankruptcy process can be complex and stressful, with a compassionate lawyer on your side, it does not have to be overwhelming.
Tolin & Tolin, PLLC will walk you through the means test process. After you choose which kind of bankruptcy is your best option, our firm can put a stop to any creditor harassment you may be experiencing. We understand that this is a stressful time for you and your family, and your long-term financial benefit is our top priority. We can also help you start over, and put you on the path to credit restoration.

Types of Bankruptcy

Chapter 7 bankruptcy is intended for those who are unable to make any further payments to their creditors. This can apply to individuals as well as families. Chapter 13 bankruptcy is structured so that some minimal payments are still required. Your means test is a uniform formula that will be applied to everyone who files for bankruptcy, and is meant to standardize the process. Chapter 7 is generally reserved for the people who need it most, or those who are in the most financial distress. There can be cumbersome paperwork involved and you may feel confused, but this is not unusual. Speak to our firm today and let us assist you in determining your best financial options.