Bankruptcy Means Test

Inflation Adjustment on income–But not on Expenses


Bankruptcy income eligibility got easier April 1, 2023 Income eligibility to file Chapter 7 bankruptcy in Virginia got easier April 1, 2023.  The median income–that’s the cutoff for automatic eligibility based on income–shot up six to ten thousand dollars. The median income for a family of four increased from $124,304 to $134,252.  For a family […]


DIY Bankruptcy Means Test — You Always Pass!


Sample_CalculationDo It Yourself projects can be terrifying — and satisfying too.   Sprucing up your home on your own, repairing the car, even doing your own tax returns can be challenging but helps save you money and makes you more independent.


Should You Delay Filing a Bankruptcy Case Until April 1?


Sometimes in a Bankruptcy case, timing is everything There are lots of numbers in the Bankruptcy Code: numbers that limit filing under Chapter 13 consumer reorganizations based on the amount of debt that you owe; numbers that determine the amount of your exemptions; and numbers that determine your eligibility for a Chapter 7 filing based [...]


Passing “The Means Test” Can Still Mean Chapter 7 Dismissal


Back when the bankruptcy laws were changed in 2005, a hard calculation was implemented, based on household income and household size, to determine whether or not a bankruptcy filer was making a “decent” living, and should be disqualified from discharging debts completely in Chapter 7 without repayment.  This hard calculation has been dubbed The Means [...]


Does the Means Test Violate the First Amendment?


Does the Means Test Violate the First Amendment? The bankruptcy means test, a much-maligned formula for determining chapter 7 eligibility, has been criticized on many grounds since it’s enactment as part of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). Critics in the consumer bankruptcy bar are quick to point out inconsistencies, contradictions [...]


The Length of Time It Will Take to Rebuild Your Credit – With or Without Bankruptcy


Clients are always concerned about their credit score.  It is not unusual for the question “How will bankruptcy affect my credit score?” to be the first thing that comes out of someone’s mouth when they consider bankruptcy as an option.  Although bankruptcy does have an effect on your credit, the effect may not be as [...]