In a Chapter 7 bankruptcy, almost everyone who files is required to take a means test. The test is designed to determine if you financially qualify to file for a Chapter 7. If you are unsure of whether or not you have to take the test, here is what you need to know.
What Does the Means Test Require?
The means tests involves taking a total calculation of your incomes, expenses, and debts and comparing it to households the same size as yours in your state. Your calculations for the last six months are used for the test. If your total income is less than the average for other households, you can apply for Chapter 7. If it is more, there is a possibility that you cannot file for a Chapter 7.
Who Does Not Have to Take the Test?
Some groups are allowed a special exception that excludes them from taking the means test. One of those groups are people whose primary debt is business related. For instance, if your personal debts only total $10,000, but your business debt is at $200,000, it is possible that you will not have to take the means test. You and your attorney will have to submit proof that the majority of your debt is related to operating your business.
If you are a member of the National Guard or serving as a military reservist, you do not have to take the means test. However, you must meet certain requirements. For instance, you have to prove that you are either on activity duty now or that you were within the last 540 days. You also have to show that you were active for at least 90 days.
A final exception is made for disabled veterans. You have to prove that a majority of your debts were incurred while you were activity in the military. You also have to prove that you are disabled and receiving financial compensation for that disability. If you are not receiving disability now, you can still qualify for the exception if you were discharged from the military due to a disability suffered while you were serving.
If you are unsure whether or not you have the right to skip the means test, you need to talk to a Chapter 7 bankruptcy attorney, like Donald T Tesch, PS. He or she can help you explore your options concerning the test and help you file your petition.
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