What is the Bankruptcy Means Test?

Bankruptcy Question: What is the “Means Test” in Bankruptcy?

Answer: The “Means Test” is one method for determining whether someone qualifies for a Chapter 7 Bankruptcy case.

One qualification to file for a Chapter 7 Bankruptcy requires that your household income be at, or below, your state’s median income for a household of your same size. The Median Family Income by Family Size can change.  Your bankruptcy lawyer can help you determine if you qualify to file for a Chapter 7 Bankruptcy.

If your household income is above median income for a household of your same size, then you must complete the entire means test form to determine if you can qualify for a Chapter 7 Bankruptcy.  In this situation, you can make certain adjustments to still qualify for a Chapter 7 Bankruptcy.  An experienced bankruptcy lawyer can help with this.  A lawyer will determine if adjusting the timing of when you file for bankruptcy, or certain other factors such as taxes paid, insurance and healthcare costs, and other regular household expenses, can help you “pass the means test”.

If your income remains too high to qualify for a Chapter 7 bankruptcy, then consider a Chapter 13 Bankruptcy.  The Means Test can help determine your monthly payment in a Chapter 13 Bankruptcy case.

Updated Median Family Income by Family Size for cases filed in the State of Oregon on or after May 15, 2021* can be found below:

Household Size:

  1. $62,059
  2. $74,283
  3. $89,565
  4. $101,773
  5. Add $9,000 for each additional individual in excess of four

*These figures can change and are specific to bankruptcy cases filed in the State of Oregon.

Please note that there are other factors to consider when determining if you qualify for a Chapter 7 Bankruptcy.  Jessica Nomie Law offers free bankruptcy consultations and will help you determine if bankruptcy is the right option for you.

The information and materials provided in this article have been prepared for informational purposes only and do not constitute legal advice and do not constitute an attorney-client relationship between you and this law firm. If you believe you have a legal case or claim, you should contact an attorney promptly; strict time limitations may apply to your case or claim.

We are a debt relief agency.  We help people file for relief under the Bankruptcy Code.

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