Last time, we pointed out that the means test is one of the requirements for qualifying for Chapter 7 bankruptcy. Not every debtor who files for Chapter 7 bankruptcy is required to submit to the means test, but only those who exceed a certain income threshold and who therefore raise the presumption of abuse.
Qualifying for Chapter 7 bankruptcy: means test
Who qualifies for Chapter 7 bankruptcy?
We mentioned last time that not everybody who decides to move forward with the bankruptcy process will qualify for a Chapter 7 filing. This is because there are specific financial requirements for Chapter 7 eligibility. The same is not true of Chapter 13 bankruptcy, which is available to any debtor whose combined unsecured and secured debts are below a certain specified amount.
What is the difference between Chapter 7 and Chapter 13 bankruptcy?
In our last post, we spoke a bit about some of the options available to struggling debtors short of filing for bankruptcy. As we noted, it is important for debtors to consider all their options prior to moving ahead with bankruptcy, particularly because the financial consequences of bankruptcy—which are obviously great for burdened debtors, in some ways—can last for years afterward.
