The Means Test in a bankruptcy determines whether or not you are eligible for a Chapter 7 filing and what amount your plan payment must be should you decide to file a Chapter 13 case.
Chapter 7
If your total household income is less than the median income for the county in which you reside, you are eligible to file a Chapter 7 without completing Form 22A.
If your total household income is greater than the median income that doesn’t necessarily mean you do not qualify for a Chapter 7. It does mean that you must complete Form 22A. Certain expenses will be taken into account to determine whether or not you have the ability to repay your debt.
This is not a simple calculation. It is a very complex formula and it is highly recommended that you do not attempt to figure this out without legal advice.
Chapter 13
If the Means Test determines you have the ability to repay some or all of your debt, it will calculate the monthly amount that you must pay as well as the duration of time you must pay.
If your total household income is less than the median income for the county in which you reside and you plan on filing a Chapter 13 case regardless, then your actual monthly expenses and income will be used to compute your plan payment.
Just as individuals may need an experienced accountant to assist them in understanding which tax deductions they qualify for, you will want an experienced attorney who can ensure you have received each and every deduction you are entitled with respect to the Means Test.
