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What
is the means test? You may have read that the new bankruptcy law imposes a "means test" on who can file for Chapter 7 bankruptcy.
You might think this new test will prevent you from filing. But, chances are, you're wrong. Most people considering bankruptcy have no trouble passing the means test. Indeed, some lawyers think more people will qualify for Chapter 7 under this test than under the old law, where judges had no fixed formula.
Use this calculator find out where you stand.
The Formula
The law now uses a standard mathematical formula to determine whether you can file for Chapter 7 -- or, to put it in legal terms, whether filing for Chapter 7 would be an 'abuse' of the bankruptcy system. (Those who fail the means test, are left with a Chapter 13 repayment plan as their only bankruptcy option.)
The means test is actually a two-part test and you only need to pass one of them to qualify for Chapter 7.
Test 1. "Median Income"
This is a very simple test that compares your average household
income for the past six calendar months to the median income for your
state, If your income is below the median, you qualify for Chapter 7.
If it is above the median, you must pass Test 2.
Test 2. "Disposable Income"
This test deducts expenses from your income to determine how much you
can pay your unsecured creditors over the next five years:
Certain deductions are standard allowances based on the number of vehicles you operate, the number of people in your household, and the cost of living in your county.
In addition, to these standard deductions, you can also deduct the full amount of certain actual expenses such as mortgage and vehicle loan payments.
Do
I need to complete the means test? If you are filing for Chapter 13 bankruptcy, you do not need to complete the means test. However, you do need to complete a form almost identical to it — and that will determine how much you must pay in a Chapter 13 plan.
If you want to file for Chapter 7 bankruptcy, you must at least complete the first part of the form to figure your "current monthly income" (CMI), which is based on your average income over the past six calendar months. That number will determine whether you must complete the rest of the form.
If your CMI is below the median income for your state for a household your size, then you do not need to complete the means test.
If your CMI is higher than the median for your state for a household your size, you must complete the means test to compute your monthly "disposable" income (that is, income minus expenses). The result of that computation will determine whether you are eligible for Chapter 7 bankruptcy.
How
long does this take? Using this calculator takes about 20 minutes. For some, the answer may be obvious after only a few questions.
This calculator is completely anonymous. We do not ask -- and no not want -- any personally identifying information linking you to these numbers, other than a zip code. We do keep statistical data on amounts that user have entered, so that the site may monitor the needs of its users and adjust services accordingly. However, To us, this is data for statistical analysis only.
If you don't put in the correct numbers in the correct blanks, this calculator won't give you an accurate result. It only does the math. It is your responsibility to put the right numbers in the right blanks. Helpful resources are available throughout the test to help you figure out what the form is asking for and what to put where.
Be sure to account for all the different kinds of income you receive. If you're not sure what to put in an 'expense' blank, skip it. You may find that it doesn't' matter -- that is, you may qualify regardless of what number you put in that blank.
If you need assistance, this website has listing of books and local lawyers that offer bankruptcy help.
If you end up actually filing for Chapter 7 bankruptcy you need to fill
out official
form (22A). which you can find here.
This calculator is based on that form.
Why do you need my zip code?We do not ask any identifying information other than a zip code..
You will be assigned a random number that will track your means test by setting a cookie. NOTE: You must allow cookies to use the calculator.
Don't Know your Zip?...
Browse by City or State
If you have more debt than you can possibly pay off, the bankruptcy system is there to help -- and with How to File for Chapter 7 Bankruptcy, you'll find the clear and user-friendly information, advice and forms you need to get through the entire process.
First, the book will help you determine whether you qualify for Chapter 7 -- and whether it is the best way to deal with your debts. Then you'll find out how to:
* stop wage garnishments and attachments
* fill out and file all the forms
* cancel as much debt as possible
* deal with secured debts
* keep the maximum amount of property
* keep your home, if possible
* rebuild credit after bankruptcy
The 15th edition is completely updated and revised to reflect the latest laws and legal forms, plus the line-by-line instructions you need to fill them out. Get new information on foreclosure and exemption requirements, and read the latest court decisions. And, easy-to-use charts make looking up your state's laws a snap.
In Paperback and eBook (Adobe Reader)
Pub. Date: Oct 2008
Edition: 15th
Pages: 560 pp
ISBN: 9781413308976
Forms: 38 forms
| "Exceptionally clear."
The New York Times |
| "How to File for Chapter 7 Bankruptcy advises on everything from how to file court papers to how to respond to threats from creditors.... A do-it-yourself bankruptcy book for people who can’t afford expensive lawyers."
Newsweek |
| "An in-depth guide to filing under Chapter 7, including state-by-state and federal exemptions as well as forms for do-it-yourself filers."
Kiplinger’s Personal Finance Magazine |
| "Can help you decide if bankruptcy is the right option for you." Detroit News |
| "A valuable, easy-to-understand workbook."
Los Angeles Times |
| "Includes clear instructions on when and how to fill out all the necessary forms, which assets you may legally keep, even advice on whether your case is complicated enough to make it worth your while to hire a lawyer."
Forbes |
| "The best [bankruptcy books] I know are published by Nolo."
Harry S. Gross, host of
“Speaking of Your Money” |
| "Covers all the recent changes to the bankruptcy law, and shows you how to get through the entire process with the least damage."
Accounting Today |
| "I bit the bullet, and purchased Nolo's How to File Chapter 7 Bankruptcy. I represented myself in court and I was granted a discharge of all debts five months later."
Danielle A.,
Richmond, VA |
In Paperback and eBook (Adobe Reader)
Pub. Date: Nov 2008
Edition: 9th
Pages: 496 pp
ISBN: 9781413308556
Forms: 29 forms
| "In Nolo’s usual thorough fashion, here is a guide to an alternative to the typical Chapter 7 Bankruptcy."
Orange County Register |
| "An excellent book that can guide you through the [Chapter 13] process."
Forbes Magazine |
| "Chapter 13 Bankruptcy will save you a fortune in attorney fees and confusion."
The Midwest Book Review |
| "This is the best book going if you choose to file alone or if you want background on the Chapter 13 process."
Attorney Gary Klein,
co-author of Consumer Bankruptcy Law and Practice |
| "An excellent resource..."
Consumers Digest |
| "Contains many tear-out forms, federal and state exemptions charts, and the most recent legal documents and instructions on how to fill them out. "
Reference & Research Book News |
The following books give you a good overview of how bankruptcy fits in the with other debt relief options, and helps you figure out how bankruptcy could help your particular debt problems.
by
Attorney Stephen
Elias. This book discusses, in plain-English
the practical implications of the bankruptcy law changes that
took effect in October 2005. The book explains how the new law is
not as bad as you may have thought. Most people
in financial straits can still gain much from filing. But there is
more paperwork and more stringent rules than under the old law.
Find out what's good about the new law, what's bad, and how the new rules may affect you.
In Paperback and eBook (Adobe Reader)
Pub. Date: May 2007
Edition: 2nd
Pages: 368 pp
ISBN: 9781413306330
Forms: 22 forms
Press Reviews
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