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What Does the Bankruptcy Means Test Show About Your Financial Situation and Why Is It Used?

The bankruptcy means test is required whether you are filing for bankruptcy under chapter 7 or chapter 13, and it has been part of the bankruptcy process for more than 10 years now. This aspect of bankruptcy has created a lot of confusion, and consumers and lawyers alike may not fully understand what this test shows and why it is used. Theoretical articles can explain the legal aspects of the means test, but what you really need to know is what this test shows about your financial situation and why it is used in the first place.

The means test is used as an objective way to determine whether your financial situation is adequate to pay back any or all of your creditors. Most people who quality for chapter 7 bankruptcy will pass the means test, or may not be required to take this test at all. Usually this test is not an issue, but what happens if you fail?

If you fail the means test does this put an end to your chapter 7 bankruptcy case? Will you be forced to file under chapter 13 instead, and pay back some or even all of the debts that you have accumulated? Will you be allowed to file for bankruptcy protection at all? Will the attorney tell you that bankruptcy is not an option based on your current monthly income and debt amounts? All of these are a possibility, bankruptcy is a legal issue that can be complex, and the answer will depend on your unique situation and the various factors in your case.

A lot of articles have been written about the means test, and legal professionals who really enjoy talking and spirited debate have been discussing this test since before it was included in the laws for bankruptcy reform a decade ago.

If you want to gain practical knowledge about the means test and eliminate any remaining confusion, and understand why the means test is not a big deal for most consumers as long as you have chosen a highly qualified attorney like James Logan, there is an excellent article on this topic by practical and extensively experienced board certified consumer bankruptcy attorney Richard West. This article will get straight to the point and help you realize what the bankruptcy means test shows about your financial situation and why this test is used today. Click this link to read the article: Bankruptcy Attorney Richard West Means Test Article.

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About the Author

Attorney James Logan provides dedicated and personalized legal representation for bankruptcy and foreclosure cases in Baltimore, MD.

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