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Use a means test to determine Chapter 7 eligibility

Ohio residents who are unsure if they will qualify to file for Chapter 7 bankruptcy can use a test to figure it out. The means test fulfills this purpose. You may be wondering what exactly a means test is, how it can help you and how you can access it. This week's column will answer those and other questions.

Means test explanation

If you choose to file for bankruptcy, there are various forms that you will need to complete. For a Chapter 7 bankruptcy filing, one of the forms you will be required to fill out is a means test. In this form, you will indicate your monthly income and compare it to the state's median income level.

To gather the information required for a means test, you will need your own personal records and state census records. If your current income falls below the determined average for Ohio residents, you will pass and will be able to submit a Chapter 7 filing.

How will a means test help me?

Completing a means test will simply help you know what type of bankruptcy you can pursue. That is its sole purpose.

How do I get access to a means test form?

The means test calculation form, known as Official Form 122A-2, is something you can access through your legal counselor. Along with this form, you will have access to and be able to fill out all the other necessary bankruptcy application documents. For a Chapter 7 filing, these are simply known as 122A forms.

What if the means test says my income is too high. Can I still qualify for a Chapter 7 filing?

If, according to the means test, your income level is higher than the state's average, you will most likely not be able to file a Chapter 7 bankruptcy. However, the means test considers more than just your monthly income. Your disposable income, or money left after paying your monthly expenses, will be taken into consideration. Allowable monthly expenses include:

  • Reasonable housing
  • Transportation fees
  • Other basic necessities

If, after paying for these things, you do not have enough to make payments on your debts, you may be able to file for Chapter 7 bankruptcy. However, if the means test determines you do have enough money left over, a Chapter 13 filing or debt consolidation may be suitable alternatives to help you get control of your finances.

Legal counsel can help you pursue what is right for you

There are various debt relief options that are available to Ohio residents. A Chapter 7 filing is just one of them. By using a means test and by seeking legal counsel, you will be able to pursue a course of action that will best benefit your circumstances.

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