Means Test
What is the means test? This new tool is something that came about due to the new laws that changed in October 2005. The purpose of the means test is to see if you qualify to file a Chapter 7. If you don’t qualify under the Chapter 7, then you will have to file a Chapter 13. This may not always be fair; because there are people who are in a situation that needs to file a Chapter 7 and can’t afford a Chapter 13 plan payment, but are forced to file a Chapter 13 if they want any type of relief. If you plan on filing a Chapter 13 to begin with, the purpose of the means test is to see if you have to pay back anything to your unsecured creditors. Under the old law, many people who should have been paying to their unsecured creditors were not, so when the creditors wrote the new law, they wanted to make sure that they were being provided for and receiving some payments from the people who should have been paying something into their unsecured. The means test can be helpful at times, but also a pain at times. In essence it ensures that people who are filing for bankruptcy are ones who are supposed to be filing and are not trying to beat the system so to speak.
