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Explaining the Chapter 7 means test

The odds are that you are not the only one in Nashua that it struggling with debt. However, depending on your financial circumstances, traditional debt relief methods may not be enough to meet the demands of your creditors. If this is the case, a personal bankruptcy may begin to seem like your most viable option. Many come to us here at The Law Office of Paul Petrillo prepared to file for a Chapter 7 bankruptcy, only to then learn that one must first qualify. If this is the first you are hearing about having to qualify for a Chapter 7 case, than an explanation of the requirements might help you in deciding whether or not this is a viable option for you.

The qualifications for a Chapter 7 bankruptcy are collective known as the Chapter 7 means test. To determine your eligibility, you must first fill out an Official Form 122A-2. The information in this form (as shared by the website for the United States Courts) requires you to provide information such as:

  •          Your adjusted income
  •          Any tax deductions you qualify for
  •          Special circumstances that may justify additional adjustments to your income status

The form also asks for you to provide specific details that may serve as an indicator of whether you may be abusing the bankruptcy protection privilege.

Basically, the means tests reviews whether or not your adjusted income falls below the median for your household size in your state. If it does, you qualify. If not, then your disposable income is reviewed to determine if after meeting your monthly living expenses, you still have sufficient funds remaining to pay your unsecured debts.

You may find out more about the details of a Chapter 7 bankruptcy by continuing to browse through our site. 

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Law Office of Paul Petrillo
One Tara Boulevard
Suite 200
Nashua, NH 03062

Phone: 603-635-4149
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