Best Bankruptcy Lawyers in Sunrise Manor, NV

We must examine the means test to see if one qualifies to file a Chapter 7 bankruptcy case. 1. Calculation of Current Monthly Income (CMI): To begin, we examine the average monthly income over the past six months. 2. Comparison to Median Income: The calculated CMI is then compared to the median income for a household of the same size in the debtor's state. If the debtor's CMI is below the median income, they typically qualify for Chapter 7 bankruptcy without further analysis. 3. Disposable Income Calculation: If the debtor's CMI exceeds the median income for their state, they must proceed with a more detailed analysis to determine their disposable income. 4. Means Test Form: Debtors use a specific form to complete the Means Test calculation, taking into account their income, expenses, and other financial factors. 5. Passing the Means Test: To qualify for Chapter 7 bankruptcy, the Debtor's disposable income must fall below a certain threshold. If it does, they are generally eligible for Chapter 7. If their disposable income is above the threshold, they may be required to file for Chapter 13 bankruptcy instead, which involves a repayment plan. The purpose of the Chapter 7 Means Test is to ensure that those who can afford to repay a portion of their debts do so through Chapter 13 bankruptcy, while those who truly cannot meet their financial obligations receive a discharge of their debts under Chapter 7.