HOW DO I KNOW WHICH ONE TO FILE?

The new bankruptcy law applies the ‘Means Test’ to your income and expenses to determine which chapter of bankruptcy you are eligible to file; 7 or 13. The Means Test is aimed at determining if you have ‘the means’ to pay back any portion of your debt, thus requiring you to file for Chapter 13. As you proceed through the tutorial and budget process of this site, we will conduct the Means Test with the information you provide.

The Means Test works in the following way:

If you make under the median income for your state, you may be eligible to file Chapter 7.
If you make over the median income for your state, the test will deduct IRS allowable expenses and then figure the total amount of money you can contribute to your debt over a five year period.

  • If this total amount is under $6,000, you may be eligible to file Chapter 7
  • If it is over $10,000, you must file Chapter 13
  • If it is between $6,000 and $10,000, you may only be eligible file Chapter 7 if this amount is less than 25% of your total, unsecured debt.

Click here to proceed to the start of your Tutorial and Budget Process