What is the means test for filing Chapter 13 Bankruptcy?

The means test is an important part of Chapter 13 Bankruptcy Law in California. It is used to determine a person’s eligibility for Chapter 13 Bankruptcy by measuring their current income against the state’s median income for the same size household. To begin the means test, the debtor must provide information about their income from all sources, including wages, investments, Social Security, unemployment, and other payments. The debtor also must provide information about their monthly expenses, such as rent, utilities, insurance premiums, taxes, and loan payments. Once these figures are gathered, the means test will calculate the debtor’s disposable income. This is done by subtracting the debtor’s monthly expenses from their monthly income. The result is the debtor’s estimated disposable income. If the debtor’s estimated disposable income is less than the median income for the same size household, then the debtor may qualify to file for Chapter 13 Bankruptcy. However, if the debtor’s estimated disposable income is greater than the state’s median income, then the debtor may not qualify unless the debtor can prove special circumstances such as medical expenses or educational expenses. The means test can be a difficult process to understand, so it is best to consult with a lawyer or financial advisor who can explain the legal requirements and help guide the debtor through the process.

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What is the means test for filing Chapter 13 Bankruptcy?

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