The means test is a financial analysis used to determine whether an individual is eligible to file for Chapter 7 bankruptcy. To pass the means test, a debtor must show that their average monthly income is less than the median income in their state for a household of their size. If the debtor’s income exceeds the median, they may still be eligible for Chapter 7 by demonstrating that they have insufficient disposable income to pay their debts under a Chapter 13 repayment plan.
However, there are certain circumstances where a debtor may be able to file for Chapter 7 bankruptcy without passing the means test. This can include:
- Debt incurred primarily for business purposes: If a significant portion of the debt is business-related, the means test may not apply.
- Disability or health problems: If the debtor can show that their financial difficulties are due to a physical or mental disability, they may not be required to pass the means test.
- Military service: Active-duty military personnel may be exempt from the means test in some cases.
It’s important to note that exemptions to the means test are subject to review and approval by the bankruptcy court, and a bankruptcy attorney can help determine if any of these exemptions apply to your case.