Understanding Bankruptcy and the Means Test
Before Congress changed the bankruptcy law in 2005, virtually anyone could file. Unfortunately, congress felt the system was being abused and a means test was added into the process. Most people who are so overwhelmed by debt that they are considering bankruptcy end up passing the means test. All the means test really does is determine whether you qualify for Chapter 7 or Chapter 13.
At the Arizona Law Group of Trezza & Associates, we assist with the means test. Contact us for a consultation with attorney Stephen Trezza.
How the Means Test Works
The means test is like a tax form. You will enter information about your income. You will also enter a variety of deductions. There are standard deductions such as food and utilities. There are also itemized deductions. The means test allows both standard and itemized deductions.
When we help you reach the end of the test, it will tell you if you qualify for Chapter 7 bankruptcy. If you do not, it is most likely because you have enough disposable income to pay off some debts. The means test will actually show how much of your disposable income has to be supplied to creditors as part of the Chapter 13 bankruptcy debt payment plan.
Preparing for the Means Test
Fifty dollars of disposable income can make the difference between qualifying for Chapter 7 and qualifying for Chapter 13. Every dollar counts, and everything should be accounted for in the deductions. That is why it is important to have the assistance of an experienced attorney when preparing for the means test.
A good example is health insurance. Many people are without health insurance when they should not be. If you purchase health insurance, it is because you need it. It may also push you over the edge to qualify for Chapter 7 bankruptcy. We will carefully counsel you about taking on expenses like this prior to taking the means test.
Contact Us for More Means Test Information in Arizona
Every case is different, so it is important to discuss your situation with a Tucson lawyer before making a decision. Contact us to discuss your options.
