Chapter 7 bankruptcy is a good option for debtors seeking to completely discharge their debts. Chapter 7 is also known as "liquidation bankruptcy" and effectively gets rid of, rather than reorganizing, the petitioner's debts. Due to the nature of Chapter 7 bankruptcy filings, there are strict qualification standards. To find out if you meet those standards, you will have to take the means test.
The means test is a way of evaluating your debts against your income and property. The means test for Chapter 7 bankruptcy is called "Form 22A" which you can find on the U.S. Bankruptcy Courts website or by contacting our firm directly.
If you wish to file for Chapter 7 bankruptcy, how you file will also factor into whether you qualify. For example, you can file as:
- Unmarried
- Married – but not filing jointly
- Married – filing jointly
If you are married, whether you are filing jointly or not, you will have to list both you and your spouse's income on the means test. The income you list must include not only your regular salary, but other sources of income such as an inheritance, royalties, and pension. Unemployment benefits are also factored into the means test, even though unemployment is not permanent.
The next major section of the means test involves calculating deductions under IRS standards, such as basic needs deductions (food and clothing), healthcare, housing, and other day-to-day expenses.
The means test requires a certain level of math on the part of the filer, which can be confusing. There are many variables in calculating your income and debts. While you do not have to have an attorney represent you when filing for Chapter 7, we strongly suggest that you do.
The Chapter 7 lawyers at San Diego Legal Pros can help you at any point during the bankruptcy process, but we suggest retaining an attorney before you take the means test. We can walk you through the means test to ensure that all the fields are filled out correctly, which gives you a better chance of qualifying. Call us today at 888-875-9190 for a free evaluation of your case.