Due to social distancing guidelines, all consultations are conducted by phone or teleconference, like Zoom, and all paperwork is handled by email or fax.

What Is The Means Test?

Determining Chapter 7 Bankruptcy Eligibility

Are you considering filing for Chapter 7 bankruptcy? If you are, then you will need to first pass the means test. This is a test that is used to identify whether or not a debtor is truly unable to repay the debt that he or she owes. The test uses the debtor’s amount of income and debt level to determine whether the individual is eligible to declare bankruptcy under Chapter 7 of the U.S. Bankruptcy Code. If the debtor passes the test, that individual is in the clear to file for Chapter 7 bankruptcy. If the debtor fails the test, he or she only has the option of filing for Chapter 13 bankruptcy (assuming that the individual meets that chapter’s eligibility requirements). A debtor passes the means test by either having an income level that is below the state median for the size of his or her household, or by having a disposable income level that is less than a designated amount.

What’s the difference between Chapter 7 and Chapter 13 bankruptcy? Chapter 7 bankruptcy uses liquidation of certain assets (where applicable) to allow filers to get great portions of their problem debt discharged. In contrast, Chapter 13 bankruptcy is for individuals with stable incomes who can pay back some or all of their debt when their payment plans are restructured. The debt that can be discharged in this type of bankruptcy is much more limited.

San Antonio Bankruptcy Attorney Offering Guidance

My name is Rick Flume, and I am a San Antonio bankruptcy lawyer who can help you properly crunch the numbers when you are taking the means test. It is my goal to provide you with the information and guidance you need concerning your bankruptcy filing options. In addition to helping you determine your Chapter 7 eligibility, I can also help you weigh the facts to see if Chapter 7 bankruptcy is truly in your benefit.

Contact my firm for legal counsel you can depend on! By getting in touch with me, you can gain access to a free case evaluation.


FREE Case Evaluation