What Is A “Means Test” And How Can It Affect Me?

: Reese Baker & Associates

  Filed under: Chapter 7

chapter 13, chapter 7, means test, bankruptcy, repayment, trustee, court, bankruptcy attorney houston, texas bankruptcy lawyers, attorney, lawyer, attorneys, lawyers, College Station, Bryan, Houston, Texas, TX, lawyers in houston, bankruptcy attorney,In 2007, the laws governing bankruptcy received an update, long overdue updates in some people’s minds. The new legislation made it somewhat more difficult for an individual to file for a Chapter 7 bankruptcy.

In the past, the rules were not as strict and the ability of the population to file for bankruptcy and have their unsecured debts wiped out was considered fairly easy. Once the new legislation took over, however, things changed a bit. Now the individual applying for bankruptcy protection is forced to submit to a “means test” which basically means that you have to be able to show through your lack of income that you are unable to repay the creditors that you are seeking protection from.

If you income is considered too high then you may not be eligible for a Chapter 7 bankruptcy and may have to follow the course of action of applying for different type of bankruptcy like a Chapter 13. If you are forced to seek a Chapter 13 the rules are vastly different and you may have to pay a certain amount of the debts back rather than have them discharged under a Chapter 7.

The best way of determining if you meet the criteria for a Chapter 7 is to seek out the advice of a qualified Houston, TX bankruptcy attorney who will be able to answer any questions you may have. Get some advice before you make the decision to file yourself. If not, you run the risk of wasting time or money or both.