The Chapter 7 Means Test

The Chapter 7 means test is a simple concept, which becomes rather complex in practice. It is simply a pass/fail test that is a strong indicator of whether a person should file a Chapter 7 bankruptcy case.

The complexity of the means test is in its application. The data used to complete the means test is a combination of your income over the past six months, some of your actual expenses, and some expenses which the government has calculated for you, called national standards.

If you fail the means test, it is usually not a good idea to file a Chapter 7 bankruptcy. Sometimes you may wait until the facts change so that you do pass the means test. Sometimes you may file Chapter 7, despite failing the means test, because the test is not an accurate depiction of your financial situation. Another option may be to file a Chapter 13 bankruptcy, which also may be very favorable for you.

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