Home / Chapter 13 / What is the Means Test and how does it affect my decision to file bankruptcy in Michigan?

What is the Means Test and how does it affect my decision to file bankruptcy in Michigan?

Your passing (or failing) of the Means Test will determine whether you can file a Chapter 7 Bankruptcy (dissolution) or whether you have to file a Chapter 13 Bankruptcy (repayment plan).

The Means Test is a major part of the Bankruptcy Reform Act of 2005. Congress enacted it to devise an income test to determine eligibility to file a Chapter 7 bankruptcy. If you fail the test – you can file a Chapter 7 bankruptcy – otherwise you are forced into a Chapter 13.

The Means Test is a “look back” test which averages your income over the previous six (6) month period. The test compares your income to the “median household income” in your county.

If your income is below the “median household income,” you are eligible to file a Chapter 7 bankruptcy. If you “pass” the means test, you may still be eligible to file a Chapter 7 – BUT it gets too complicated for an easy FAQ answer.

You need to call me at (877)233-9389 so that I can personally assess your situation and give you a professional opinion.

If you have any questions about Bankruptcy in Michigan, call the law office of Michael J Shovan PLC right now at (877) 233-9389 and speak to an attorney who can answer your questions. Michael J Shovan PLC is a debt relief agency and we help people file for bankruptcy under the laws of the United States Constitution, Article 1, Section 8.

This post is for informational purposes only and is not intended to constitute legal advice. Any relationship with this firm will be established by a written agreement signed by both parties. If you have read this far, you need to call me at (877) 233-9389 or email me at mike@mikeshovan.com.

I can help you.

Stop the madness. Let’s put a plan together. I did it and so can you. Mike