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There’s a lot that goes into filing for Chapter 7 bankruptcy. It’s recommended to know the entire process before filing. Part of the filing for bankruptcy process is taking the bankruptcy means test. Understanding the Chapter 7 test is going to make the entire process less frustrating.

Law requires that anyone filing for Chapter 7 bankruptcy must take the Chapter 7 means test. The test is going to figure if your income is below, equal or above the median income in your state. If your income is above the median then you’ll need to file Chapter 13, which doesn’t completely eliminate your debt but creates a plan that allows you to pay off your debt during a certain amount of time.

Here is important information to understanding the Chapter 7 means test.

Using the Internet

You won’t have a difficult time finding the Chapter 7 means test online. Keep in mind that some websites might charge a fee to view the test and others do not. Click the free means test calculator where you’ll then enter the required information. Each state has different bankruptcy laws so it’s important to follow what your state requires

Means Test Calculator

The Means test calculator is going to figure out if you need to take the real means test. Expect questions about how may people are in your household and how much your monthly income average during the past six months. Exceeding the median income means you’ll have to take the test. The test will give you the chance to list your expenses, which will then decide if you eligible to file for Chapter 7 bankruptcy.

Breaking Down the Test

The ch 7 means tests broken down into different sub categories. Each group will allow you to list all your expenses that the IRS allows. This will confirm whether you can file Chapter 7 bankruptcy. Expenses you’re allowed to list include: food, household supplies, car expenses and utilities. After the deductions are given, the final decision will get made. The amount that determines who qualifies for bankruptcy will vary from state to state.

Understanding Chapter 7 Test is essential when filing for Chapter 7 is the right step for them. Those who don’t qualify end up qualifying for Chapter 13, which won’t take care of your debt for you but it will help create a realistic plan to get your out of debt. The important bit of information people need to consider is that whether your filing for Chapter 7 or 13, it will stay on your credit for up to 10 years and could affect purchases you may want to make in the near future.