THE MEANS TEST

In the Bankruptcy Abuse Prevention and Comprehensive Planning Act (BAPCPA) Congress enacted a significant change to the Bankruuptcy Code that required debtors to undergo a "Means Test" in order to be eligible to file. It was desinged to weed out abusive filings and compel people to file Chapter 13 if they have sufficient disposable income according to an artificial formula cooked up by politicians that has nothing to do with reality or your particular situation,

The "Means Test" works like this: First, you determine your filing status: 1) single, 2)married filing jointly, 3) married not filing jointly, 4) or married with a declaration of separate households. You take your I income from whatever source for a six month period.

You then enter how many dependents you have.

If your income is over the median for the District in which you reside, congratulations, you get to proceed to the next round and figure out whether your allowances and whether that will bring you below the presumption of an abusive filing.

You are allowed certain deductions for things like secured debt payments on houses and vehicles,

You get to deduct actual expenses for such things as taxes paid, child support, term life insurance, medial expenses, court ordered payments.

Remember, this is an artifical test, invented by Politicians, and measured by IRS standards. It doesn't necessarily reflect reality. The good new that in practice, experience has shown that most filers are unaffected by the means test and are still eligible to file Chapter 7.