In order for a Chicago debtor to qualify to file under Chapter 7 of the U.S. Bankruptcy Code, he or she must first pass the means test. This test is designed to determine whether a debtor has the disposable income necessary to make regular payments under a Chapter 13 repayment plan. As a part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, the means test was implemented to avoid the abuse of Chapter 7 bankruptcy by debtors who actually had the money to pay off a portion or all of their debt under a Chapter 13 filing.

The means test is made of two parts: an analysis of the debtor's income and then an analysis of the debtor's disposable income. If a debtor makes less than the median income in his or her area, that debtor has passed the means test. If a debtor makes more than the median income, he or she must move on to the second part of the test - a comparison of his or her income versus necessary expenses to determine his or her "disposable income".

Interested in finding out whether you may pass the means test and whether Chapter 7 bankruptcy is even the right option for you? Take this opportunity to talk to a skilled professional about your unique case. Contact a Chicago Bankruptcy Attorney at the Law Offices of Marc Wagman, LLC today at 312-489-8182.