Not everyone is eligible to file for Chapter 7 bankruptcy. If you are considering it to address your financial challenges, it is important to understand the eligibility rules. The most important element to consider is the means test.
There are a few things everyone should know about the means test if they consider Chapter 7 bankruptcy.
Does everyone have to meet the means test?
The means test is only mandatory for certain filers. If your annual income is at or below the median income for your household size in Missouri, you are exempt from the means test. Consumers whose debt consists of medical bills and accident debts are exempt from the means test as well. Also, any military veteran whose debts result from their service of the country may be exempt from the means test.
Those whose annual income exceeds the median income for their household size with consumer debts to discharge must meet the means test in order to qualify for Chapter 7 bankruptcy.
What is the means test?
The means test is a calculation of your monthly income less certain pre-determined expenses. The resulting figure is what the state deems your disposable income. If the disposable income is low enough, you pass the means test and can file Chapter 7.
Understanding the means test and the median income levels for the state of Missouri helps you determine if Chapter 7 bankruptcy is right for you. Gather your income details and complete debt information to start the initial qualification process.