The means test while filing for Chapter 7 bankruptcy | The Colpitts Law Firm
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The means test while filing for Chapter 7 bankruptcy

Many people in Oklahoma find themselves struggling with overwhelming debt. When they have exhausted many of their options to manage debt, they often decide to pursue Chapter 7 bankruptcy protection. However, before such a petition is approved, those requesting such protection must pass a means test.

The means test is a measure that began as a result of the Bankruptcy Protection Act of 2005 as a result of inconsistent and lenient standards related to bankruptcy courts. There are two parts to the test. First, the court looks at whether a filer's monthly income in the six months prior to filing is at or below the state median income. If it is, the filer passes the test. If it is not, the filer will have to move on to the second part of the test.

Then, the court examines whether the person could pay toward restructured debts after deducting certain expenses. If so, the filer will be converted to a Chapter 13 bankruptcy. Even if the person fails the means test, he or she can still file for Chapter 7 protection. However, it will be necessary to establish that special circumstances, such as unusually high rent, a medical condition or unemployment prevents the filer from making reorganized payments through a Chapter 13 filing. Documentation of these claims must be provided.

Often due to circumstances beyond their control, people in Oklahoma can suffer as a result of overwhelming debt. While they work hard to meet their financial obligations, many people are in a situation where they must make a difficult choice in order to protect their long-term financial future. An attorney with experience with Chapter 7 bankruptcy can help someone struggling determine if he or she might qualify for such protection and, if so, initiate proceedings.

Source: FindLaw, "The Bankruptcy Means Test", Accessed on Oct. 26, 2017

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