After the laws changed back in 2005, it required Debtors who were filing for bankruptcy to provide their last 6 months pay stubs to conduct a means test. For Chapter 7 bankruptcy, the means test is conducted to ensure that no one is abusing the system and qualifying to file a Chapter 7 bankruptcy rather than a Chapter 13 bankruptcy. Once the means test is conducted and it reflects that you make too much money, meaning you are above median income, then you are forced to file a Chapter 13 bankruptcy and pay back some of the debt that you owe.
If the means test determines that you are above median, there are additional steps that are taken to ensure that you don’t qualify. In a Chapter 7 bankruptcy, it allows us to take into account your payroll taxes and any mandatory deductions that are taken from your pay. If you have insurance for medical and you have medical expenses, those are taken into account. If you have child support that is ordered by the court and you have child care, those are some additional deductions that are allowed.
If you are concerned about whether you qualify for a Chapter 7 bankruptcy or a >Chapter 13 bankruptcy, consult a bankruptcy attorney to help you determine which route would be best for you.
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