What is the bankruptcy means test?

In late 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was enacted into law. Among other things, this act requires a “means test” to see if debtors qualify for Chapter 7 bankruptcy relief. The means test examines your monthly income and expenses and compares them to the median income in and around your area. Typically, if you make less than the median income for a family of your size, you are allowed to file Chapter 7. If your income exceeds the median income, you may not be allowed to file Chapter 7, but may be allowed to file Chapter 13, which may require repayment of some of your debts within three to five years.

Glenn A. Brown, Esq.

Attorney Glenn Brown and the Real World Law team provides legal protection to homeowners and businesses in eminent domain and condemnation actions, commercial and residential real estate closings, and other litigation matters. If you're a property owner in need of legal protection, contact our law firm. We've two convenient office locations, serving communities in and around Upper Darby, PA and Wilmington, DE.

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