If you’ve decided to file for Chapter 7 bankruptcy, you should be prepared to pass a “means test.” Now! How to Pass The Means Test in Chapter 7?

The bankruptcy means test determines who can file for debt relief through Chapter 7 bankruptcy.

It takes into account your income, expenses and family size to determine whether you have enough disposable income to repay your debts. Although it was designed to restrict the number of debtors who can get their debts forgiven through a Chapter 7 bankruptcy, most people who take the means test pass it easily.

If your annual income, for a family the size of yours, is below the median for State of Michigan (if you file in Michigan), you are free to file the bankruptcy chapter of your choice.

However, if your annual income is above median, you have to apply the means test formula for comparing future expenses against that historic income.  If that formula says that you have $400 a month in discretionary income, then a Chapter 7 case is presumed to be an abuse of bankruptcy law.

The current median household income for Michigan is $54,909.00.

The court presumes that a debtor who fails the means test is abusing the Chapter 7 bankruptcy process. But you might be able to overcome the presumption of the abuse. To do so, call our Michigan bankruptcy lawyer in Detroit areas at (248) 281-6299 or visit our website BankruptcyMax.com