What is the so-called means test under the Bankruptcy Abuse Prevention and Consumer Protection
Act (BAPCPA) and how does it affect my ability to file for bankruptcy?
The means test is designed to prevent 'abusive' filing of Chapter 7 discharges under § 707(b)(2). Debtors whose debts are mainly personal in nature (such as consumer loans or credit cards for the debtor and/or family) who want to seek Chapter 7 protection must pass the means test to determine if they are eligible for Chapter 7 or will have to file Chapter 13. The means test operates by comparing the debtor's current monthly income (the average of all income earned six months prior to bankruptcy filing) to the state's median family income (for families of the same size as the debtor's). If the debtor's income is above this median, they may be foreclosed from filing Chapter 7 and have to file Chapter 13 (they will not get a discharge but have to repay their debts according to a repayment plan). Debtors whose income is below the state median income will be allowed to file a Chapter 7 unless the court or US Trustee determines that such would be an abuse under § 707(b)(2).
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The means test is designed to prevent 'abusive' filing of Chapter 7 discharges under § 707(b)(2). Debtors whose debts are mainly personal in nature (such as consumer loans or credit cards for the debtor and/or family) who want to seek Chapter 7 protection must pass the means test to determine if they are eligible for Chapter 7 or will have to file Chapter 13. The means test operates by comparing the debtor's current monthly income (the average of all income earned six months prior to bankruptcy filing) to the state's median family income (for families of the same size as the debtor's). If the debtor's income is above this median, they may be foreclosed from filing Chapter 7 and have to file Chapter 13 (they will not get a discharge but have to repay their debts according to a repayment plan). Debtors whose income is below the state median income will be allowed to file a Chapter 7 unless the court or US Trustee determines that such would be an abuse under § 707(b)(2).
