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Understanding the means test before filing for bankruptcy

On Behalf of | Feb 4, 2015 | Chapter 7 Bankruptcy, Firm News

When the decision has been made to file for bankruptcy, there are certain steps that must be taken before any paperwork can be filed. For Florida residents, understanding the type of bankruptcy for which one is eligible is the first step. If you feel that Chapter 7 bankruptcy is the right choice for you, it is necessary to understand the facts about the means test first.

The means test simply takes your income and compares it to the median income in your area. More specifically, your income is compared to the median income for a family of the same size. If you fall below this median income, you can file for Chapter 7 bankruptcy. 

If you do not qualify for a Chapter 7 bankruptcy under the means tests, you can still petition to file. However, it may be suggested that a Chapter 13 bankruptcy is the better solution for your financial situation. Some find that a Chapter 13 bankruptcy better suits their situations because it may allow them to retain ownership of assets that they would lose were they to file a Chapter 7 bankruptcy.

The means test not only determines eligibility for Chapter 7 bankruptcy, but may also allow a Florida petitioner to have a better understanding of where he or she stands and what his or her next step should be. Every situation is different, so it is important to gather all of the information concerning your financial situation before filing. Our website can offer more information about the means test and how to get the ball rolling if bankruptcy is needed to help you get back on stable financial footing.

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