How to Handle Bankruptcy

What to Know About the Bankruptcy Means Test

Bankruptcy is a complex situation that some people feel that they need to go through with for various reasons. However, a lot of people might not have known that they have to qualify for a Chapter 7 bankruptcy and it can cost you more money to file that you ever thought possible. These stipulations and a bit more information is given when you go to take the bankruptcy means test.

The Bankruptcy Means Test

The bankruptcy means test determines whether or not the family would do well without the support of going through a bankruptcy or getting on government assistance of some sort. It calculates the income going into the home compared to the income going out of the home in various levels. This can determine if the individual would be a good candidate for filing a bankruptcy or if they should apply and will be qualified to receive government assistance.

This test prevents wealthy people from being able to obtain help from these government assisted programs, as well as from filing a bankruptcy. If they have the means to pay for their debt – they should be paying for them without the help of these assistant programs.

The median income is determined for each and every state and then each and every household has to fall below this median in order to qualify for these programs. This is stated when the individual applies for the assistance or for a Chapter 7 bankruptcy. It also includes the other working adults in the household that are helping to pay for the bills that are coming in and going out of the home. The limit can vary depending on the size of the household and number of dependents living in the household.

There are many different factors that come into play with the bankruptcy means test and understanding them can save you a lot of time and money if you’re choosing to either apply for government assistance or if you’re thinking about filing for a Chapter 7 bankruptcy. The bankruptcy means test can let the official know if you truly cannot or do not have the means to pay back the debts that you currently owe.

What if I Do Not Qualify?

If you do not qualify through the bankruptcy means test for a Chapter 7 bankruptcy then you can consider filing for a Chapter 13 bankruptcy to help repay some of the debts that you have. However, this is another section of bankruptcies that you have to thoroughly look through to ensure it is the right option to go with since it does cost money and can require a lot of time and paperwork.

Thoroughly understanding all of your options when it comes to filing any type of bankruptcy is essential. You will have a better idea of where you stand once the means test has been performed and whether or not you qualify. You have numerous options available to you on how you’re able to lower your debt payments and also get back on track to financial success.

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