Understanding the Means Test and Filing for Bankruptcy

Bankruptcy is never something individuals or families pursue lightly but when it becomes impossible to keep up with financial obligations in difficult economic situations then filing for bankruptcy protection may be the right thing to do. The first step you should take when you find yourself pinned down under a mountain of debt is to speak with a bankruptcy lawyer. A careful look at your specific situation can then reveal what the best course of action is for you. If it is in your best interests to file for bankruptcy then an experienced attorney can help you in determining which Chapter of protection is right for you or which one you qualify for.

Qualifying for Bankruptcy Protection: The Role of the Means Test

The Means Test is the test used by the bankruptcy system for determining if someone is eligible for bankruptcy protection and if they are, the test also determines which type of protection they are eligible for. The information for the Means Test ("mean" referring to an average) must be carefully and honestly filled out. The first part of the test is simply determining where the individual's income falls when compared to the average income of other individuals with comparable households. If it is less than the average, or mean, then you go on to the next step of the test. The second part of the test is best done with the help of a knowledgeable lawyer because it is the step that determines what the individual's disposable income is in the eyes of the bankruptcy courts. Disposable income is what financial resources the potential filer would have left which could be used for repaying debts after qualifying expenses are deducted. It is crucial that this step be done correctly and includes all living expenses that you and your family must deduct from your household income. Depending on the outcome of the Means Test you may be able to file for either Chapter 13 or Chapter 7 bankruptcy protection.

Bankruptcy Attorney Helping Families and Individuals in San Diego

An attorney with our firm at the San Diego Bankruptcy Pros has helped clients through every step of the bankruptcy process from the Means Test to the final moment when those debts are discharged. We fully understand the stress and constant worry overwhelming financial obligations can cause and we may be able to help you and your family become free of them. Contact us today to schedule a free initial consultation!