What is the Chapter 7 Means Test

An evaluation of a debtor's disposable income over the course of the prior 60 months is more commonly known as a means test. The means test is primarily designed to determine whether an individual is eligible to file for Chapter 7.

A debtor’s median income level is compared to the state’s overall median income. The median income level varies by state, and numerous factors such as a debtor’s family size can also impact possible deductions.

When a means test shows that a debtor is making more money than the median income level for the state in which he or she is filing bankruptcy, it can lead to a possible "presumption of abuse" of the Bankruptcy Code. Even if a debtor does not pass the means test, he or she may be able to possibly rebut any presumption of abuse or file Chapter 13 bankruptcy instead.

Bankruptcy Attorney in Cincinnati, OH Discusses Chapter 7 Means Test

If you are preparing to file for Chapter 7 bankruptcy in Ohio or Kentucky, do not add to your stress by worrying about a means test. Steiden Law Offices can provide the legal assistance you need to complete the means test, successfully file bankruptcy, and move on with your life.

Our Cincinnati bankruptcy lawyers represent people of various income levels in communities all over Northern Kentucky and Southern Ohio. Call right now to have our attorneys provide an honest and thorough evaluation of your case during a free initial consultation.


Northern Kentucky Chapter 7 Means Test Information Center


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Purpose of Chapter 7 Means Test in Ohio

One of the major changes to the Bankruptcy Code that resulted from the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) was 11 U.S. Code § 707 being amended such that a bankruptcy court, United States trustee, bankruptcy administrator, or any party in interest can dismiss a case filed by an individual debtor whose debts are primarily consumer debts, or, with the debtor’s consent, convert such a case to a case under chapter 11 or 13, if there is a finding that the granting of relief would be an abuse of the Bankruptcy Code.

The means test was primarily added to BAPCPA as part of an effort to discourage or prevent individuals with higher incomes from filing Chapter 7. When a presumption of abuse is found in a means test, such a presumption can be rebutted with evidence of special circumstances—such as a recent job loss, serious medical condition, or being called into active military duty.


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How the Chapter 7 Means Test Works in Kentucky

When a debtor's current monthly income is less than the state median income for a household of his or her size, that individual immediately passes the mean test. A means test becomes much more complicated when a person's income exceeds the state median income.

If a debtor's monthly income is more than the state median income, the means test determines whether he or she has enough disposable income to pay off some portion of his or her unsecured debts. Disposable income is calculated by subtracting all allowable expenses from a debtor's current monthly income—a figure that is typically based on the average of his or her income for the previous 60 months.

People who pass the means test can proceed with filing for Chapter 7. If an individual does not pass the test, an experienced attorney may be able to identify errors such as overestimating income or underestimating deductions that could help the debtor pass the means test.


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Ohio Chapter 7 Means Test Resources

Chapter 7 | Bankruptcy Basics | United States Courts — Use this section of the United States Court website maintained by the Administrative Office of the U.S. Courts on behalf of the Federal Judiciary to learn more about Chapter 7. Find information about Chapter 7 eligibility, alternatives to Chapter 7, and how Chapter 7 works. You can also read about the Chapter 7 discharge.

Means Testing | UST | Department of Justice — Visit this section of the United States Department of Justice website to find information relating to means testing. Read about the United States Trustee Program's position on legal issues arising under the Chapter 7 means test. You can also learn more about Census Bureau data, IRS data, and administrative expenses multipliers.


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Steiden Law Offices | Cincinnati Chapter 7 Means Test Lawyer

Are you concerned about the impact a means test could have on your upcoming Chapter 7 bankruptcy filing? You can reduce your stress by making sure that you retain legal counsel.

The dedicated Cincinnati bankruptcy attorneys of Steiden Law Offices represent clients in communities all over Hamilton County in Ohio and Kenton County and Boone County in Kentucky. You can have our lawyers review your case and answer all of your legal questions as soon as you call or complete an online contact form to receive a free, confidential consultation.


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