What is the Bankruptcy Means Test and Why is it So Important?

When you are struggling through hard times financially, you may feel as if you have no options. For anyone who needs help to end creditor harassment, however, bankruptcy is one alternative of which most consumers can take advantage. Consumer debtors generally have two bankruptcy choices – Chapter 7 and Chapter 13. Which one you file depends on a variety of factors, but the starting point is the bankruptcy means test. Maryland bankruptcy attorney Kevin D. Judd can evaluate your finances and help you figure out where the means test places you.

The means test is a form you must file with the bankruptcy court. The form is a calculation of your average gross income over the six-month period prior to your bankruptcy filing. For example, if you file your case in October, your calculation time period is April 1 through September 30. If your average gross income is below the median for your household size in your residential area, you have passed the means test; you do not have to complete the entire form. You can file Chapter 7 or, if you need to file a Chapter 13 case, you can limit your case to three years.

If your income is above the median for your household size, however, you must complete the entire means test form, completing a series of deductions based on Maryland and Washington DC bankruptcy law and rules. If you are filing a Chapter 13 case, your case must run for five years. If you want to file Chapter 7, your deductions must be sufficient to take you below the median – otherwise, you will have to file a Chapter 13.

You can obtain a copy of the means test, which is Form B22A for Chapter 7 and Form B22C for Chapter 13, either from the Maryland bankruptcy court, the Washington DC bankruptcy court or the courts’ websites. The bankruptcy court and the bankruptcy trustee will scrutinize your bankruptcy means test very carefully; therefore, completing correctly the before you file it is paramount. Completing the bankruptcy means test without a bankruptcy attorney’s assistance could result in the wrong type of bankruptcy for your situation. The best thing to do is make an appointment for a free consultation with Washington DC bankruptcy lawyer Kevin D. Judd. Find out how our lawyer can help you with your financial crisis – call today.

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