About the Chapter 7 Bankruptcy Means Test

Wondering If You Qualify for Chapter 7? We Can Help You Find Out.

If you find that you are unable to keep up with your monthly bills and know that there’s no way to bring your accounts current, you may have considered filing for Chapter 7 bankruptcy. In Florida, this debt relief process allows debtors to declare themselves insolvent. Once all phases of Chapter 7 are complete, you emerge free of most obligations. However, not everyone qualifies for Chapter 7 bankruptcy, which is why it’s always beneficial to have an experienced bankruptcy law firm helping you through the process. Owenby Law, P.A. is exactly that kind of law firm.

If you have considered filing for Chapter 7, you may have heard about the "means test." This is a standard based upon the average incomes of individuals and families in Florida. Chapter 7 of the U.S. Bankruptcy Code mandates that all individuals must pass a state-specific means test in order to qualify for protection under this section of the law. Our Jacksonville bankruptcy lawyers can review your income and other financial factors to help you determine whether or not you qualify for this chapter.

How the Means Test Determines Eligibility for Chapter 7

The means test factors in the number of individuals in your household and your family’s total income over the past six months. This is then compared to the median income of families from around the state of Florida. If your average monthly income over the past six months is greater than the median, you would not qualify for Chapter 7 bankruptcy. If this is the case, however, Chapter 13 may still be a option. If your monthly income is below the state median, you qualify for Chapter 7. Our lawyers can help you understand if this chapter best fits your needs.

Means Test Example

Consider a household with two income-earning parents and three minor children who do not work. If the parents averaged $5,000 per month over the past six months ($30,000), that is the number that will be compared against the median for families of that size throughout the state. Currently, the median monthly income for a household of five is greater than the $5,000 used in our example, so this family would qualify. Please note that expenses are not considered in Chapter 7 means testing. The number is based solely on income and household members.

Other Factors That Will Determine Your Eligibility for Chapter 7

Before the bankruptcy court will consider you for Chapter 7, they will first want to determine if you have the ability to repay your obligations. This is done by determining if you pass the means test, which demonstrates that you are experiencing financial hardship. We can determine whether you would likely be able to declare bankruptcy under Chapter 7. If not, we are able to offer you alternative solutions, including Chapter 13.

Aside from the means test, the bankruptcy court will also consider:

• If you have previously filed for Chapter 7 or Chapter 13

• If you have failed to complete mandatory credit counseling

• If you have committed any form of bankruptcy fraud

What Kind of Debts Are Dischargeable in Chapter 7 Bankruptcy?

Not all debts can be discharged under Chapter 7 bankruptcy. Student loans, alimony, child support, and debts owed for personal injury are examples of non-dischargeable debts. Most unsecured personal debt and obligations acquired through credit cards are dischargeable under Chapter 7. Our caring legal team can help you determine whether Chapter 7 will be useful with your particular debt composition.

Find Out Which Chapter You Are Eligible to File Under

If you are considering Chapter 7 bankruptcy and feel that you need a legal professional to help guide you through the intimidating and complex bankruptcy process, the experienced legal team at Owenby Law, P.A. is ready and willing to help. We are able to review your personal financial situation, determine whether or not you will qualify, prepare the appropriate documentation, and enroll you in credit counseling class. The Jacksonville bankruptcy attorneys of Owenby Law, P.A. have helped numerous clients get a fresh start through the bankruptcy process.