What should I expect from the bankruptcy means test?

Dealing with overwhelming debt is unpleasant, and it can bring a host of serious consequences to your life. From calls from creditors to possibly losing your belongings to repossession, you probably want to find a way to make it all stop and deal with your debt once and for all.

One of the most effective ways to deal with debt is to file for bankruptcy. While this might not seem like an ideal step to take, bankruptcy could actually help New Jersey residents achieve a stronger financial future. If you decide to take this step, you will have to take a means test. That will look at your finances and determine which chapter of bankruptcy it is you will have access to. 

What's on the test?

The means test takes into consideration your income, the types of debt you owe and other factors pertaining to your financial situation. Chapter 7 is a common and popular type of consumer bankruptcy, but not everyone who wants to apply is eligible. The means test is a way to determine if this is the right option or if you should file for Chapter 13. Consider the following about the means test:

  • If most of your debts accumulated as a result of business expenses, you may not be eligible for Chapter 7 bankruptcy.
  • The means test takes into consideration all forms of income, including salary, rental income and much more.
  • If your income is more than the state's median income amount, you will have to complete the second part of the test.
  • The second part of the test takes into account all of your expenses.
  • After calculating your expenses, if you still have enough to pay for part of your unsecured debt, you may not qualify for Chapter 7.

Chapter 7 is a popular choice for individuals with a lot of unsecured debt. If this is your first choice, yet you do not qualify, you still have option to file for Chapter 13 bankruptcy.

Understanding your options

If you are dealing with debt and are unsure of what to do next, you may find it beneficial to seek a full understanding of the legal options available to you. Whether you qualify for Chapter 7 or want to learn more about what to expect from the means test, you have no time to lose to learn about the benefits of consumer bankruptcy.

Difficult debt may be overwhelming your life, but there are options available. Through bankruptcy, you can find a better financial future for you and your family.

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