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Video Blog 2012 January Means Test & Chapter 7 Bankruptcy
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Means Test & Chapter 7 Bankruptcy

Posted By Demetria Graves || 5-Jan-2012

Chapter 7 Bankruptcy refers to the section in the bankruptcy code that relates to liquidation bankruptcy where your non-exempt assets are liquidated to pay off your debts. Any unpaid debts after that process are forgiven so that you can start afresh financially. To be eligible to file for Chapter 7 Bankruptcy you have to pass the Means Test i.e. your income needs to be below the Means Test level set for your state. Generally, if you fail the Means test, there are some things you can do to handle this or you may want to consider filing for Chapter 13 bankruptcy instead.
If you know your income is higher than the Means Test level, here are some things you can do to change things so that you may qualify:
1. Buy health insurance
Health insurance is deductible from your income so having this insurance would lower your income level.
2. Take the Means test at the right time
For many people, income may vary depending on the timing. After losing your job, your income obviously reduces substantially, so you should take the Means Test when your income is at its lowest.
3. Review the number of people in your household
The Means Test takes into consideration the total income of those who live in your household, not only the members of your family. This consideration may be able to reduce your household income, depending on your circumstances.

Categories: Bankruptcy

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