New York residents like you who are having financial struggles may need help digging yourself back out. This is where filing for bankruptcy can come into play. Today we’ll take a look at the bankruptcy means test and how it relates to your ability to file for Chapter 7 bankruptcy.
FindLaw goes into detail about the bankruptcy means test. It’s considered an important tool for prospective filers of Chapter 7 bankruptcy. This test sets a standard by which applicants are measured to see if they qualify to file bankruptcy under Chapter 7. In other words, you do need to pass this test in order to even have the option of filing. This test was put into place to help make standards consistent across the board. It also combats the side-effects that came from lenient handling of bankruptcy cases in the early 2000s.
There are two primary steps to take for this test. In step one, your average income over the last 6 months will be compared against the state’s average income. If yours is equal to or less than the state average, you qualify. Income can include anything from royalties and interest to compensation payments, salary, and wages. Some exclusions apply, such as tax refunds.
If you are considering filing for bankruptcy, you may want to reach out to an experienced attorney. They can coach you through the options that are available, help you find ones that you may not have known about, and share educated opinions regarding the financial moves you could make next.