What If I Fail The Ch.7 Means Test?

01 - May - 2019
Credit Card Debt

Why Do I have to Take the Means Test?

Chapter 7 bankruptcy completely discharges most debt including credit cards, medical bills, payday loans and personal loans. It also clears balances on cars and real estate. Chapter 7 allows a person to keep much of their property. The process of filing chapter 7 is quicker and cheaper than filing Chapter 13. For these reasons, Chapter 7 is often what consumers inquire about first when considering bankruptcy.

Bankruptcy Laws & Means Test

Bankruptcy laws stemming from 2005 have made it more difficult to qualify for Chapter 7. The means test can disqualify someone who has a high monthly income. It can also disqualify anyone who has had a bankruptcy discharge in the past six to eight years. Basically, the Chapter 7 means test is a “qualifier” to determine eligibility. When you have the help of a bankruptcy attorney, the means test is easier to take. Your attorney will then determine the next best steps to make.

Means Test has Two Parts

The bankruptcy means test comes in two parts. The first part of the bankruptcy means test compares your average household income to the average median household income in Wisconsin. If your income is more than the median in the state, the assumption is that you may have enough disposable income to repay your creditors. If this is the case, then you must take part two of the means test and pass it to show otherwise.

The Bankruptcy Means Test

Instead of just looking at household income, the second part of the means test indicates how much disposable income you have. Disposable income is based upon your living requirements and expenses. If you have not recently filed bankruptcy, and your monthly income is less than the median income in the State of Wisconsin,the Chapter 7 means test should be easy. If your expenses far outnumber your income, then passing the Chapter 7 means test should still be easy. However, it’s important to realize that failing the Chapter 7 means test doesn’t mean that you have discounted other options.

Other Options To Get Out of Debt
In Wisconsin, about two-thirds of bankruptcy petitions are Chapter 7. If you pass the means test to file this bankruptcy type, then the attorneys at Debt Advisors will quickly and efficiently put things in order to eliminate your debt. If you don’t pass either of the two parts of the Chapter 7 means test…don’t worry! Most attorneys will provide other options to get out of debt, (such as the Chapter 13 Repayment Plan or Wisconsin Chapter 128). Remember that all debt relief options have their pros and cons. There is much to consider and evaluate, which is where your bankruptcy attorney can help. It’s always advisable to hire an attorney from a reputable law firm. Utilize free case evaluations to get a good feel for who you are dealing with and potentially retaining to represent you.

Why Debt Advisors?
A good lawyer will guide, educate, and assist in a way that places your personal situation and needs as top priority. All of this, including the experience handling bankruptcy cases, and the focus on client satisfaction, is why the attorneys at Debt Advisors can showcase so many great customer reviews on Google. Is it your time to get out of debt? Need more reasons why you should choose Debt Advisors? Have more questions about the bankruptcy means test? Request your free consultation today. If you decide to hire Debt Advisors; count on solid advice, getting your questions answered and feeling confident that you are going to make the best decision to become debt-free.

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