Understanding the Bankruptcy Means Test
If you're considering filing for Chapter 7 bankruptcy, you'll need to take the means test—a crucial step that determines your eligibility. This test compares your average household income over the past six months to Ohio’s median income for a household of your size. If your income is below the median, you’re presumed eligible for Chapter 7. If it’s higher, additional calculations factor in your allowable expenses to see if you have enough disposable income to repay your debts in chapter 13. The means test aims to ensure that no one is abusing the bankruptcy process.
It's also very important to note the means test only triggers a “presumption of bankruptcy abuse” (if you FAIL) OR “no presumption of bankruptcy abuse” (if you PASS). This opens up more complexities:
Just because you “fail” the means test and trigger the “presumption of bankruptcy abuse,” does not necessarily mean you can’t file. It simply means you’re presumed ineligible, but that is a “rebuttable presumption.”
On the other hand, just because you “pass” the means test, does not mean you are perfectly in the clear for a chapter 7. There are other considerations that can be grounds for ineligibility. For example: Increased income going into the future could certainly open up an argument that you indeed can afford to pay back your creditors in a chapter 13 vs chapter 7.
It’s a complex process, and consulting a qualified bankruptcy attorney in Ohio is highly recommended for accurate guidance. Call/text/email to schedule a FREE consultation.
Thanks,
Lucas Ruffing
Attorney
740-815-1114 (call/text)
LucasRuffingLaw@gmail.com