If you are considering filing for Chapter 7 bankruptcy, the means test will help determine whether or not you are eligible. The means test consists of a formula which looks at the finances of the individual filing for bankruptcy. It is important to know that just because you have a regular income does not mean that you will fail the means test. The means test simply wants to determine whether you are able to repay your debts on your own without the help of bankruptcy. This could actually be helpful because it could help you determine if bankruptcy is the right option for you.
The first step in the means test is to compare your income with the median income in your state for a household of the same size. If what you make a year is less than the average income of other households of the same size, you will automatically pass the means test. If your income is not below average, you still could be able to pass the test as there are further steps. After this, the means test will try to determine the amount of your disposable income and whether this is enough to repay your debts.
If you do not pass the means test, but you still think that filing for bankruptcy is in your best interests, you should contact the team at the Maida Law Firm. Chapter 13 bankruptcy could be another good option for you or you could be able to take advantage of an alternative form of debt relief. Please, do not hesitate to get in touch with a Houston bankruptcy lawyer from our office to learn how we could help you regarding the means test. Call the office today for a free case evaluation!