The Bankruptcy Means Test

How the Chapter 7 Means Test Works

Before you are able to file for Chapter 7 bankruptcy, you must first qualify for the process by taking a “means test.” The means test was created to ensure that those individuals who have sufficient income to repay some of their debts do so, while reserving Chapter 7 for those who do not have the means to pay back their debts.

When taking the means test, the first step will involve comparing your average income to the median income of the state of California. Your average income will include any and all monies received, such as:

  • Wages, salaries, or tips
  • Dividends and interest
  • Unemployment compensation
  • Workers’ compensation
  • Income from rental properties
  • Alimony or child support
  • Income from retirement benefits
  • Disability insurance

If your average income is below that of the state average, then you will be able to file for Chapter 7. If your income is above the state average, you can subtract certain expenses from your income in order to establish your actual disposable income. If your disposable income falls below a certain preset limit, it is likely you will be able to take advantage of Chapter 7. If the disposable income figure is above the preset limit, you will probably be required to file for Chapter 13. For assistance in completing the means test, it is recommended that you contact a Ventura bankruptcy attorney.

Bankruptcy Attorney in Ventura

Bryan Diaz Law, P.C. provides high-quality legal assistance through each phase of the bankruptcy process, including the completion of Chapter 7 means tests. Our firm is available to guide you through the means test and the rest of your Chapter 7 proceedings in an effort to secure your freedom from debt as quickly and efficiently as possible.

Contact a Ventura bankruptcy lawyer if you require help in taking a Chapter 7 means test.