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The Means Test Explained 

If you are considering filing for Chapter 7 bankruptcy then you may have heard of the Means Test. The test basically determines whether your income is low enough for you to file for Chapter 7 bankruptcy. 

Since Chapter 7 bankruptcy is known for debt forgiveness and discharging the debt, passing this means test determines whether your debt can be wiped away. If the slate cannot be erased, then you can still consider another bankruptcy option – Chapter 13 bankruptcy. 


What is a Means Test

Designed to restrict the number of people who can have their debts discharged, the means test takes a close look at your income, expenses, and the size of your family to determine whether you have enough disposable income to repay your debts. There are two main parts to the means test to be aware of. 

The first part of the test checks whether your household income is below your state’s median household income. That means that you will need to gather all sorts of documentation including your income. Generally, collecting the last six months of documents will do. Amazingly, most people pass the means test and do not need to consider Chapter 13 bankruptcy. In fact, in 2013, 88% of debtors passed the means test. 

The second part of the test involves gathering documentation that examines your “allowable expenses” such as groceries, rent or mortgage payments, medical expenses, or clothing. This part can seem overwhelming because if you forget or omit a document, or if expenses do not match up, then your case could be denied. It is important to be as thorough as possible. Don’t hide or withhold anything from your lawyer or the court. Be forthright and honest throughout your bankruptcy case.

The process involves filling out one or possibly both of the forms below, and making calculations based on the information you input, to determine whether you pass the bankruptcy means test.

Do you need help with financial burdens that have become too much? Bankruptcy may be the fresh start you need. Call the Law Office of Barry R. Levine and let us help you. Call us at 978-922-8440, or visit our website at