Call Now!
Call Us 414-326-9231 608-260-7133 Text Us 414-326-4709

What is the Chapter 7 means test?, P.1

We spoke in out last couple posts about how a debtor’s income can impact debt relief both outside of bankruptcy and within bankruptcy itself. As we noted, a debtor’s level of income can affect whether or not he or she is able to successfully keep up with monthly payments negotiated with debtors, as well as whether the debtor qualifies for Chapter 7 relief and what a debtor’s repayment plan will look like in Chapter 13 bankruptcy.

In Chapter 7 bankruptcy, the means test is the tool by which bankruptcy courts determine whether a debtor is eligible for Chapter 7 relief. The idea behind the means test is to prevent abuse of Chapter 7 bankruptcy by those who have an ability to pay back some of their debts.

When a debtor files for Chapter 7 bankruptcy, he or she is required to enter income and expense information, and make certain calculations based on the information that has been entered. The forms relating to the means test are 22A-1 and 22A-2. Together, these forms determine whether a debtor’s income and expenses create a presumption of abuse which could prevent the debtor from obtaining Chapter 7 relief.

Form 22A-1 comprises what is called the Chapter 7 Statement of Your Current Monthly Income. Debtors first fill out this form to determine whether their monthly income is more than the median income for households of the same size in their state. If not, there is no presumption of abuse and the debtor does not have to fill out Form 22A-2.

In our next post, we’ll continue this discussion and look at Form 22A-2, which deals specifically with the Chapter 7 means test. 

No Comments

Leave a comment
Comment Information
Email Us For A Response

Free Case Evaluation

* indicates required field

Miller & Miller Law, LLC
  • VISA
  • Master Cards
  • Discover
Milwaukee Office map Madison Office map Kenosha Office map

633 W Wisconsin Ave, Suite 500
Milwaukee, WI 53203

Phone: 414-312-6581
Fax: 414-277-1303
Milwaukee Office

2810 Crossroads Drive
Suite 4001
Madison, WI 53718

Phone: 608-260-7133
Madison Office

6123 Green Bay Road
Suite 210
Kenosha, WI 53142

Phone: 262-326-1669
Kenosha Office

Appleton Office
4321 W. College Ave.
Suite 200
Appleton, WI 54914

Phone: 920-280-3838
Appleton Office

Brookfield Office
200 S. Executive Drive
Suite 101
Brookfield, WI 53005

Phone: 262-261-0665
Brookfield Office

Glendale Office
6333 N. Green Bay Avenue
Glendale, WI 53209

Phone: 414-973-8662
Glendale Office

Fax: 414-277-1303 - We also have offices in Appleton, Glendale and Brookfield to better serve you.