Am I Eligible For Chapter 7?

A debt discharge is the goal of consumer debtors when they file bankruptcy.  In Chapter 7, a discharge may not be available to everyone.  To ensure that potential filers were not abusing the system, Congress created a Mean’s Test that debtors must “pass” in order to invoke Chapter 7 bankruptcy relief.  When computing the Mean’s Test formula, there are several steps to determine whether a presumption of abuse arises.  The first step is to compare the debtor’s annual income to the median income of the state in which they reside.  The US Trustee website keeps track of government figures in this area.  The applicable state median income will go up or down depending on the size of the debtor’s family.  (more…)