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Do I Need to Take the Means Test to File for Bankruptcy?

Do I Need to Take the Means Test to File for Bankruptcy?

Are you filing for Chapter 7 bankruptcy in Georgia? You must qualify first under “the means test.” This is a test that determines if one’s income is too above the median for their household size, to be eligible for Chapter 7 bankruptcy.

Read our blog for more about the means test and how it relates to your bankruptcy filing!

What Are the First Steps?

Before beginning with the means test, you must first participate in a credit counseling course that the U.S. Trustee in Georgia has approved. Next, you will need to enroll in a debtor education course before you can have your debts fully discharged. These steps are all necessary to differentiate those who are truly in need and cannot pay off their debts. The bottom line? If your income is below the median, then you pass the means test and are eligible to file.

The means test is the phase just before filing for bankruptcy. If your income is higher than the median, then you must pass the means test to determine whether or not you may be eligible for Chapter 7 bankruptcy. The other option would be to try Chapter 13 bankruptcy, which allows you to pay off the debts over time.

Should I Choose Chapter 7 or Chapter 13 Bankruptcy?

If you do pass the means test, this only means that you qualify, but not necessarily that you should. Only a seasoned Atlanta bankruptcy lawyer can help answer the question about which debt relief situation is right for you.

Chapter 13 bankruptcy is usually the more desirable way to resolve debts, especially if you have some debts that are not protected under Chapter 7. Chapter 13 bankruptcy allows you to structure your debt into a much more manageable payment plan. It is useful in cases where you wish to stop the repossession of your car or the foreclosure of your home. Or, perhaps you have a sincere desire to pay off the debts accordingly. Whatever the case may be, trust our Atlanta bankruptcy attorney to help yo make the right decision and help you move forward.

If you have any further questions about the means test and what it means for you and your debt resolution needs, please contact Khoshnood Law Firm, P.C. today to request a free case review.