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The importance of the means test

By: Darrell Castle

When you’re in debt and unable to pay your bills, a bankruptcy is a great route to gain back your financial freedom.


When filing for bankruptcy, you can file a Chapter 7, which is a complete discharge of your debt, or a Chapter 13, which is a payment plan. Both plans come with different requirements and benefits.

An experienced bankruptcy attorney will help you decide which bankruptcy chapter is best for you, and one of the first things he or she will do is a means test.

A means test is a government formula that is used to determine Chapter 7 eligibility. It’s basically a formula that shows whether or not you will be able to make small affordable monthly payments through a Chapter 13 based on your monthly income and expenses.

If a person is not eligible for a Chapter 7, then they can file a Chapter 13.

Again, it’s important to note that one bankruptcy chapter is not better than the other. Which bankruptcy chapter your attorney helps you file is completely based on what you qualify for and what’s best for your situation.

If you’re behind on your house or car payments, by filing a Chapter 13, you can keep your property while making payments on them. In a Chapter 7, you must be current on your payments to keep your house and car, but it will allow your dischargeable debts to be discharged without the payment plan.

With a Chapter 13, you’re also getting yourself in the habit of making your payments on time, which will be important for re-building your credit after the bankruptcy process has been completed.

If you’re considering filing for bankruptcy, our firm would love to talk to you. We’ve received the Client Distinction Award from Martindale-Hubbel for client satisfaction multiple times, which just goes to show the lengths we’ll go to get our clients out of debt and on to a better life.

We not only help our clients get out of debt, but we help them recover from it by offering free access to 7 Steps to a 720, an online course that teaches you how to re-establish and rebuild your credit the RIGHT way.

To schedule a FREE consultation with one of our attorneys, call us today at (901) 327-2100 or fill out one of the contact forms on this page.