The Means Test

Greenbelt attorney helps you file for Chapter 7 bankruptcy

A Chapter 7 bankruptcy can be very helpful to those who are struggling financially, but not everyone qualifies to apply for one. To successfully file for Chapter 7 bankruptcy, you must pass a means test. The Law Office of Ronald L. Schwartz closely reviews your case and determines if you can pass this test. Attorney Schwartz can also advise you on other options if you do not qualify.

What is the means test?

Put simply, a means test is the method by which the court determines whether you have the ability to pay back your creditors. Chapter 7 bankruptcy does not require that you repay your debts. You are not allowed to file for this type of bankruptcy unless you can prove that you don't have the ability to repay what you owe. This may be due to your debts being too large for you to handle or because you are unemployed or suffered a medical ailment that has left you unable to work. The means test process determines:

  • Average monthly income - Your monthly income is measured against the average for a family of your size in Maryland. If your income is lower than average, you are likely to qualify for Chapter 7.
  • Disposable income - If your average monthly income is higher than the average for the state, you may still be able to qualify if you can show that you do not have enough disposable income to pay your creditors. Disposable income is what you have left over after you have paid for housing, food, utilities and taxes. Generally, you can qualify if your disposable income is below $100 per month.

What happens if I fail the means test?

If you do not pass the means test, you can still file for Chapter 7 bankruptcy, although the court is likely to dismiss your case. The Law Office of Ronald L. Schwartz carefully reviews your financial assets to determine if you are eligible. If you're not, Attorney Schwartz can help you file for Chapter 13 bankruptcy, which does not require a means test.

Call today for a meeting with a bankruptcy means test attorney serving Beltsville, Greenbelt, College Park, and Silver Spring

The Law Office of Ronald L. Schwartz can be reached at 301-892-3410 or online. Contact Attorney Schwartz for a free consultation. In addition to other services, the firm is a debt relief agency that helps people file for bankruptcy relief under the bankruptcy code.