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Means Test forms an important part of the Chapter 7 bankruptcy case says lawyers of Los Angeles based bankruptcy law firm https://www.staging.recoverylawgroup.com/. Your ability to pass the Means Test determines your ability to file for Chapter 7 bankruptcy. this test is based on your income and household size. For you to be able to pass this test, your median income should be less than the median income for a household of the same size in your state. The previous six-month income prior to a bankruptcy filing is taken into consideration.
Every state has a different limit. In case the median income is below the numbers specified for your household size, a “short-form means test” needs to be completed. If, however, your median income is above the median income, you have another option available. This test determines whether your income and expenses make you eligible for Means Test. Mortgage or car loan can lower monthly income so that you can probably qualify for Chapter 7 bankruptcy.
Which incomes are included in Means Test?
Considering that your average household income is important for you to pass the Means test, you should be aware of which incomes are included in this test. In Schedule, I, all types of incomes including your expected monthly income are listed. However, all of them are not included in the Means Test. The incomes which matter include:
- Income generated through regular employment, business, retirement, pension, etc. You should also include any child support or alimony income that you receive in Means Test.
- Disability income including Social Security Disability and Veteran Affairs Disability is not included for Means Test.
If your income becomes high enough (due to Social Security or VA benefits) to disqualify your Means Test, you can avoid including them and thus qualify for Chapter 7 bankruptcy. If you are thinking of getting rid of debts through Chapter 7 bankruptcy, qualifying the Means Test is a necessity. You should consult an experienced lawyer regarding whether you can qualify for Chapter 7 or not. Discuss your case with skilled bankruptcy attorneys at 888-297-6023.