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What is a means test in bankruptcy?

What is a means test for bankruptcy purposes?

Wikipedia defines a means test as:

"a determination of whether an individual or family is eligible for help from the government."

In bankruptcy, the means test determines whether your income is low enough for you to qualify to file under Chapter 7.

The following is some, but not all, of the information required to conduct a means test:

  • 1) A person's pay stubs and his/her spouse's pay stubs for the last six months. From here the income needs to be analyzed , as well as each deduction.

  • 2) A person's household size.

  • 3) The mean income in the state the person resides in.

  • 4) The IRS allowed expenses for the county the person resides in.

  • 5) A person's secured and priority debt balances, such as mortgage, car, and IRS debt balances.

  • 6) A person's retirement contributions, such as IRA or 401K.

  • 7) A person's evidence of monthly charity contribution.

  • 8) A person's internet expense.

  • 9) A person's monthly contribution to a disabled or elderly family member.

  • 10) A person's expenses for his/her child's education.

  • And more...

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