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On Behalf of | Dec 8, 2017 | Bankruptcy

When most people think of bankruptcy, they think of a Chapter 7. This is the type of bankruptcy that, using liquidation of assets, effectively cancels most debt. Though things like student loans and debts to the IRS are not wiped away, Chapter 7 bankruptcy is the quickest and most complete erasure of debt available. However, not everyone qualifies for this type of bankruptcy. In order to make an informed decision, you must know some key pieces of information; this will help you take the Means Test, which will let you know definitively what your financial situation is.


If you want to proceed, you must know certain numbers. The size of your household will help determine the end result, so you must include everyone in your household, including yourself. You must know exactly how much debt you owe, what your assets are, whether or not your home has equity, and other things of that nature. This test also involves a bit of number-crunching, but for those who are not particularly numbers-oriented, you can go to your attorney or put your information into an online calculator.

How Does It Work?

For each household size, there is a “median income.” This is the most correct average for a family your size. If your income is below the median, you automatically qualify; however, if your income is above the median, you must subtract six months of necessary payments, such as rent, groceries, and medical expenses, from six months of your average income. This new number is your disposable income. If six months of your disposable income is inadequate to repay a small portion of six months of your debt, you qualify for a Chapter 7. Even if you believe you have failed the Means Test, you may still qualify for a 7; an attorney can help you determine whether or not you have made a mistake.

Do I Have to Take It?

If you want to file a Chapter 7, you must take the Means Test. As Chapter 7 is a somewhat extreme solution to an extreme debt problem, it is important that you do not file if it is unnecessary. If you do not want to take the test, you will only be allowed to file a Chapter 13; though there is nothing wrong with a 13 and may in fact be the better option for your situation, you will not be able to receive a near-complete erasure of your debt.

Remember: filing for bankruptcy is simply a logical step in the process of debt relief and management. Still have questions about Chapter 7 bankruptcy? Call us today to schedule a free, no obligation consultation with BDJ Express Law.

Please call us at 801-658-6901 for our Draper office bankruptcy consultation or 801-658-6901 for an Ogden office bankruptcy consultation. Don’t let your unanswered questions or bankruptcy worries keep you from filing – Call us at BDJ Express Law today!