If you are one of the many consumers in New York struggling to get ahead of your piling debt, you may start to consider filing for bankruptcy as a way of getting the fresh start you seek.
One step in the process of receiving help from a consumer bankruptcy is to qualify for the appropriate plan. This involves taking and passing what is referred to as the means test.
An income and expense review
At its core, the bankruptcy means test reviews your income and expenses to determine if you qualify to file bankruptcy. As explained by NerdWallet, consumers filing for Chapter 7 bankruptcy plans and Chapter 13 bankruptcy plans must go through a means test. Each type of plan has its own threshold for qualification.
The bankruptcy means test reviews your finances for the six months leading up to your application for bankruptcy. You will need to provide details on all bills and debts, including regular household and living expenses in addition to proof of all income during this time.
If you file a means test for a Chapter 7 bankruptcy, you may pass and proceed to file your bankruptcy. If you do not pass the means test, you may meet the criteria for a Chapter 13 bankruptcy. You may also choose to wait for a period of time and take the Chapter 7 means test again as you may qualify the second time.
More information about the types of bankruptcy plans available for consumers and what is involved in qualifying for a bankruptcy plan may be found at the Chapter 7 means test page of our New York bankruptcy website.