What Are My Options If I Cannot Pass the Means Test?

Are you currently considering a bankruptcy filing in South Florida but unsure about your ability to pass the “means test”? If so, it is important to understand whether the means test is even applicable to your bankruptcy plans, and if so, what your options might be if you cannot pass the means test. In short, even if an individual cannot pass the means test, there are other options for filing for bankruptcy. In addition, you should keep in mind that sometimes debtors correctly assume that they cannot pass the means test, but in some cases, a debtor can actually pass the means test to qualify for Chapter 7 bankruptcy. Our West Palm Beach bankruptcy attorneys can tell you more, and we are here to speak with you today about your bankruptcy plans.

Who Needs to Pass the Means Test?

Before you begin looking into other bankruptcy options if you think you cannot pass the means test, it is important to understand if you actually need to pass it. The means test is used to determine whether an individual can file for Chapter 7 bankruptcy. It is not used for businesses, and it is not used for other types of individual bankruptcies such as Chapter 13 or Chapter 11.

Can You Pass the Means Test?

If you do want to file for Chapter 7 as an individual, you should discuss your financial circumstances with a bankruptcy attorney before you assume that you cannot pass the means test. A person passes the means test either by showing that their current monthly income is less than Florida’s median family income, or by showing that your disposable income is low enough for Chapter 7 bankruptcy to be appropriate, meaning that you do not have enough disposable income to repay your debts.

More Bankruptcy Options

Even if you cannot pass the means test, you still have options if you want bankruptcy protection. Most debtors who cannot pass the means test to qualify for Chapter 7 bankruptcy will file for Chapter 13 bankruptcy instead. For some debtors who are at risk of home foreclosure, this type of bankruptcy can actually be more beneficial because it can allow the debtor to stop the foreclosure and to keep their home.

If your secured or unsecured debt totals are too high to qualify for Chapter 13 bankruptcy, you will still have the option to file for Chapter 11 bankruptcy. While Chapter 11 is a bit more complex and expensive than a Chapter 13 filing, it is also a type of reorganization bankruptcy that provides the same benefit of allowing the debtor to stop a foreclosure.

Contact Our West Palm Beach Bankruptcy Attorney for Assistance 

If you want to find out more about your options for filing for bankruptcy, it is important to discuss your financial circumstances with an attorney who can help you. Certain calculations and eligibility determinations can be complex, but a lawyer can clarify the options that are available to you and can assist you with your bankruptcy filing and throughout your case. Contact one of the experienced West Palm Beach bankruptcy lawyers at Kelley, Fulton, Kaplan & Eller today to have your questions answered and to begin working on your bankruptcy filing.

Source:

law.cornell.edu/uscode/text/11