Understanding The Means Test For Bankruptcy

In 2005, the United States government enacted the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). Commonly referred to as the Bankruptcy Act of 2005, its intent was to prevent perceived abuses of the system. In doing so, it implemented several significant changes. One of the most startling changes is the implementation of a “Means Test.” According to any bankruptcy lawyer in Fairfax, VA, those most affected are those applying to file Chapter 7 bankruptcies.

What is a Means Test?

A means test is a specific method applied by officials, usually government, to help to determine the eligibility of an individual or family unit for assistance of some form. The test involves looking at a set standard and comparing it with what the individual or family possess. If the test indicates to the government the capability of the family or individual to do without government help, the assistance will be denied. Two examples of the implementation of a means test by the government are in determining the eligibility of applicants for Medicaid and Chapter 7 Bankruptcies.

What Happens Under the 2005 Bankruptcy Act Means Test?

If you file in Virginia for bankruptcy, a lawyer in Fairfax VA will explain the basics of the Means Test. The government officials responsible will dissect both your submitted income and expenses to see if you are eligible for Chapter 7 or even Chapter 13. To accomplish this, the courts will first examine your median income for the 6 months previous to filing bankruptcy. They will compare this figure with the state norm as decided by them. If your figures indicate you to be below the State median for Virginia, you may proceed to file Chapter 7. If it falls above, further examination using he means test will be employed to determine whether you can go ahead and file Chapter 7 or must consider using Chapter 13 instead.

In order to begin the process, you must supply the proper paperwork. This means talking to a bankruptcy lawyer. In Fairfax, VA a qualified and knowledgeable attorney will make sure you include the pertinent material including:

  • Current income sources
  • Key financial transactions over at least a 2 year period
  • Monthly living expenses
  • Secured and unsecured debts
  • All assets and possessions – property but note exemptions from seizure
  • Income tax returns for the past two years
  • Loan documents

These items may help to cement your case for filing for bankruptcy. A lawyer will help you file them in their proper forms or schedules.

When it comes to filing for bankruptcy, a lawyer in Fairfax, VA can help you file the paperwork. He or she will also fill you in on determinants of eligibility before you file, including the Means Test instituted under the Bankruptcy Act of 2005. For more information,



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