Means Test

Phoenix Bankruptcy Lawyers

In 2005, the federal government passed legislation that requires people to take a means test before they are allowed to file for Chapter 7 Bankruptcy or Chapter 13 Bankruptcy.  The purpose of the test is to determine if individuals are eligible for bankruptcy filing.  The test is also used to determine which type of bankruptcy is appropriate for individual consumers. 

When the means test commences, the judge presiding over the bankruptcy proceedings will look at the average income the person received 6 months prior to the proceedings.  The person’s average income will then be compared to the median income of the state. 

If the court finds that the person’s average income exceeds the state’s median income, the person will not be allowed to file for Chapter 7 Bankruptcy.  However, he/she may be eligible for Chapter 13, which would allow the person to repay his/her debts to creditors over the course of 3 to 5 years.  On the other hand, if the person’s average income is below the state’s median income, he/she would be granted permission to file for Chapter 7.

In order for people to learn more about the Arizona means test, it is advised that they speak with an experienced bankruptcy lawyer prior to initiating the bankruptcy process.  A bankruptcy lawyer can give people the information they need to evaluate their average income and prevent them from wasting time if they are considered ineligible.  Additionally, if people are found to be ineligible for bankruptcy according to their means test results, a knowledgeable bankruptcy attorney can suggest debt resolution alternatives.  At The Phoenix Bankruptcy Law Firm we are very familiar with the Arizona means test and are more than willing to address peoples’ questions and concerns.

Phoenix Bankruptcy Law Firm

If you are considering bankruptcy, contact our independent Phoenix bankruptcy lawyers today!

The Phoenix Bankruptcy Law Firm assists individuals who are looking to file for bankruptcy in Phoenix and surrounding areas in Arizona such as Tuscon, Mesa, Glendale, Tempe and Prescott.