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What is a bankruptcy qualifiers test and how does it work?

Financial trouble doesn’t make you a failure. Sometimes financial catastrophe strikes from unexpected medical conditions or sudden job loss. Perhaps, you were never taught how to budget your money, save or spend wisely. You are not alone. There are many Americans who struggle with financial debts.

If you are considering filing for bankruptcy, you need to know if you will first qualify to start the process. Depending on the type of bankruptcy you wish to file (chapter 7 or 13), you will need to take a “means test” to see where you stand with your debts and income.

What you need to know

In addition to contacting a bankruptcy lawyer, you should also do your research in what to expect. The more information you gather ahead of time, the more you can ask a lawyer questions and have a clear idea of the type of situation you are facing.

Here’s what you need to know when it comes to Kentucky bankruptcy law:

  • A means test applies to those with higher incomes regarding household size
  • The test will reveal your ability to make payments on unsecured debts for Chapter 13
  • Test exemptions apply to debts that are primarily consumer classified

The process of a means test

A means test is designed to classify the types of debts you have and the type of income you have (e.g. disposable amounts, etc.). The first step of the process is measuring your income against the state average income. It is best to have plenty of documentation available for the past six months. This includes income and debt amounts and paperwork. The “pass” or “fail” status of your test will determine whether you are able to file for Chapter 7 or 13 bankruptcy. However, if you fail the test, you will only have Chapter 13 bankruptcy as an option.

Anytime you are facing a situation that involves your finances, you are also risking your future. You don’t want to make a difficult situation worse by ignoring the help of legal experts in this area. It is important to get your questions answered and seek quality help for the issues you are facing.


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