In order to qualify for Chapter 7, you must pass the "means test"-a formula used to determine whether you have enough money to pay creditors. The purpose of the means test is to reserve Chapter 7 for those of us who really need it. If you do not pass the "means test" you can still file a Chapter 13 bankruptcy.
The "means test" is a two-step process:
- Compare Median Income
- Calculate Disposable Income and Unsecured Debts
This process is rather complex and it is recommended that you hire an attorney who can help you with this process. Failure to do this right can result in getting your Chapter 7 petition rejected by the court.