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The Bankruptcy Means Test

What Is the Bankruptcy Means Test?

In the event that your debts have become overwhelming, or if you are facing foreclosure on your home, you may wish to consider filing for bankruptcy protection. 

While bankruptcy may be the only option available to some people, it also has major ramifications that should be considered before making any decisions about your financial future. 

For example, depending on the type of bankruptcy, a bankruptcy will appear on your credit record for seven or ten years, depending on the length of time it has been open. 

Credit cards, vehicle loans, and mortgages may become more difficult to acquire in the future as a result. It could also result in increased insurance premiums and, in some cases, make it difficult to find work or rent an apartment.

North Carolina Bankruptcy attorney 

While filing for bankruptcy in the United States is a painful decision, it is often the best course of action for many individuals who are drowning in debt. Bankruptcy has a poor reputation, and many people believe it is a bad thing, yet it may help you eliminate debt, provide additional time to repay obligations and provide peace of mind by putting an end to the constant calls from debt collectors. 

Chapter 7 and Chapter 13 Bankruptcy

Chapter 7 and 13 bankruptcy are two of the most prevalent types of bankruptcy, as it enables you to reduce or erase your existing debt. This is the ideal alternative for persons who are completely incapable of repaying their obligations because they will never be required to do so. However, the bankruptcy process is frequently lengthy and difficult. Not only must you assess whether you qualify for this type of bankruptcy, but you must also supply sufficient information about your present financial situation.

If you are considering Chapter 7 bankruptcy, it is critical that you guarantee that you will receive the necessary relief. At the Cameron Bankruptcy Law Office, a North Carolina bankruptcy attorney is prepared to assist you throughout the legal process, ensuring that your rights are respected and that you receive the appropriate amount of debt relief. Even if you are completely confused about where to begin, our bankruptcy law firm offers a completely free and confidential consultation to explore your case.

Our firm has been assisting residents of Raleigh in achieving the financial peace they deserve. We are committed to assisting you in managing your financial difficulties so that you can rebuild your life or business. Our attorneys recognize that a poor investment or economic slump should not determine the remainder of one’s life. As such, we offer a judgment-free service aimed at assisting individuals, families, and businesses in regaining their footing.

If you or a loved one is struggling financially as a result of substantial debt, a Raleigh bankruptcy lawyer at the Cameron Bankruptcy Law Office can assist you in determining whether bankruptcy is the best option for you. We are prepared to counsel and advise you on the best course of action to take, as well as advocate for you throughout the legal process. 

Do not continue to suffer under the weight of your debt; contact our office today via email, live chat, or phone at (919) 899-2776.

Do I Require the Services of a Bankruptcy Attorney?

Bankruptcy is often a lengthy and complicated procedure with numerous steps and criteria. When filing, there are a number of hoops to jump through. These are meant to weed out those who are ineligible to receive this type of aid. While these are vital safeguards, they make it more difficult for eligible applicants to finish the process without making potentially fatal errors. You will be required to supply detailed information about your finances, employment, home environment, and other aspects affecting your financial situation. If you do not supply all needed information, your claim may be delayed greatly or even dismissed on a technicality.

Bankruptcy attorneys are familiar with these procedures under the North Carolina law and will assist you in completing your claim correctly. Additionally, they can offer you solid information regarding the type of bankruptcy that is best for you and the outcome of your claim. When it comes to something as serious as bankruptcy, you cannot afford to make any errors, which a qualified attorney can help you avoid.

What is the Bankruptcy Means Test?

Certain persons who are unable to pay their debts, such as credit card debt and past-due medical payments, may file for Chapter 7 bankruptcy. If you qualify for Chapter 7 bankruptcy, you may be able to have the majority of your debts discharged. This implies that these debts are wiped out, and creditors cannot continue to pursue you for payment.

However, certain criteria must be met in order to discharge debt in a Chapter 7 bankruptcy case.

Congress developed a “means test” to determine eligibility in cases when a debtor’s debt is predominantly consumer debt in nature.

The bankruptcy means test assesses whether your income (calculated over the preceding six months) and costs (some actual, some standardized) preclude you from filing for Chapter 7.

How to Complete the Bankruptcy Means Test in Chapter 7

In 2005, bankruptcy processes were amended to include means tests to prevent misuse of a system that enables individuals and corporations to work their way out of heavy debt burdens.

When it comes to Chapter 7 personal bankruptcy, which involves the liquidation of assets to pay debts, the question of means is whether you have enough income to make a payment toward your debts. If you are unable to do so, many of your debts may be discharged, meaning you are no longer legally obligated to pay them.

The first question in the Chapter 7 bankruptcy means test is whether your monthly income is greater than or less than the North Carolina and South Carolina median income. This is determined by the size of your household.

If your current monthly income is less than the median income for a household of your size in North Carolina, you are presumptively qualified for Chapter 7 bankruptcy, although your case may still be dismissed for abuse.

If your income exceeds the typical income for a household your size, the high cost of living may qualify you for Chapter 7 bankruptcy. After expenses are deducted, the means test looks at your remaining, disposable income.

Contact a Raleigh Bankruptcy Attorney for Legal Advice

If you or a loved one is battling excessive debt in a bankruptcy court, you do not have to suffer in silence. Chapter 7 bankruptcy may be the best option for reestablishing financial stability and reviving your life or business. Cameron Law Office’s Raleigh attorneys have the experience and expertise necessary to guarantee that you receive the legal advice you require. Do not hesitate to contact us today via email, live chat, or phone at (919) 899-2776 for a free consultation.

Raleigh Bankruptcy Attorneys


(919) 627-7748