Means Test for Your Chapter 7 Bankruptcy

: Reese Baker & Associates

  Filed under: Chapter 7

chapter 7There are rules and regulations pertaining to every chapter of the different forms of Houston bankruptcy. In the Chapter 7 bankruptcy normally the debtor has to comply with the means test in order to qualify for this form of bankruptcy. This does not occur in all cases however.

There are circumstances where the means test does not have to be completed. If your debts are mostly business that’s you may not have to qualify for the means test. In this case many of the courts will use what is called a profit motive test, and this determines if your debt is a business debt. Your business debt can often be part of guarantees for loans for your business that you personally made.

Jurisdictions differ in their bankruptcy requirements and it may be that your tax may be deemed as a business debt as well. In order to be exempt from the means test in your Chapter 7 bankruptcy, it would mean that more than 50% of your entire debt load would have to be classed as business debt.

Another reason the means test may be excluded is if you are a disabled veteran. Provided that most of your debt was accumulated during the time you were on full time active duty, or if you were performing Homeland defense responsibilities. There are specific rules and regulations that are in place for the means test concerning disabled veterans and your lawyer will assist you with determining this.

The same may apply if you are a reservist or a National Guard. Again, there are specific rules and criteria that must be met in order to be exempt from the means test for Reservists are National Guards. It is important that one never assumes that their Chapter 7 bankruptcy is going to be handled exactly the same as someone else’s. Although the rules and regulations apply to all they are utilized individually pertaining to the debtor’s requirements and needs.