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Means Test: Requirement for Chapter 7

Are you eligible to file for Chapter 7 bankruptcy?

In order to file for Chapter 7 bankruptcy, it must be deemed that you are eligible to do so. In order to qualify for bankruptcy, your income has to be too to pay back your debts. The means test is used to determine your eligibility. At our firm, the Law Office of Joseph P. Doyle, we provide our clients with top quality, personal service, and our deep understanding of all of the elements of bankruptcy law has proven to be of great value, including helping our clients with the means test.

What is the Means Test?

The means test is a formula that was devised in order to prevent those who have chosen to file for bankruptcy, but have a higher income, from filing for Chapter 7. Since Chapter 7 bankruptcy comes with severe penalties and erases debt by selling assets, it is not something people who have the means to pay back their debts should file. Those who fail the means test, yet still want to file for bankruptcy may file for Chapter 13. However, it should be noted that just because your income is high does not mean that you are automatically not eligible to file for Chapter 7. If you earn a substantial income, but you have high expenses, you may still be eligible to file under Chapter 7.

The means test works by deducting your specific monthly expenses from your current monthly income. This calculation will determine if you have a monthly disposable income that could pay off your debts. Those who have a disposable income that is higher than the state's median will not be deemed eligible to file for Chapter 7 bankruptcy. It should be noted that you are only required to take the means test if your debts are primarily consumer-related. If your debts are business-related, you are not required to take the means test.

To find out if you are eligible to file for Chapter 7 bankruptcy, contact our Kane County Bankruptcy Lawyer Joseph P. Doyle. We will help you with the means test and figure out the next steps to take. Contact us today.



105 S. Roselle Road, Suite 203 Schaumburg, IL 60193

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Joseph P. Doyle - Kane County Bankruptcy Attorney
Located at 1646 Ravine Lane, Unit 202 Carpentersville, IL 60110. View Map
Phone: (847) 994-2520 | Local Phone: (847) 985-1100.
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