Qualifying for Bankruptcy: The Means Test

qualifying for bankruptcyQualifying for bankruptcy starts with taking a means test, which takes into consideration several factors, including disposable income and various other sources of income or lack thereof. Attorney Ted Troutman in Portland, OR, can assist with these processes to determine if you qualify for Chapter 7 bankruptcy. He has practiced bankruptcy law for more than 30 years and can help you review your bankruptcy options. 

What is the Means Test?

The means test is a preliminary test used to evaluate your income and determine if you qualify for Chapter 7 bankruptcy. To qualify for Chapter 7, your income must fall under the median income for the state of Oregon. The means test will determine if your income is low enough to qualify. 

How it Works

The means test is used to determine whether you can feasibly repay some of your debts. In general, if your monthly income is less than the median income in the state of Oregon, you pass the test. If your income is higher than Oregon’s median income, there are additional requirements you must meet to qualify for Chapter 7.

Requirements to Pass the Test

If your income surpasses the median income, we must further analyze your monthly income and expenses. The test evaluates your monthly income minus monthly expenses to determine your amount of disposable income. If your disposable income surpasses a set level, you do not pass the means test. 

Mr. Troutman can evaluate your financial situation and administer the means test to determine the best strategy for helping you start a new phase of financial stability in your life.

What if I Fail the Means Test?

If you fail the means test, you cannot file Chapter 7 bankruptcy. Failing the means test does not mean you cannot file for bankruptcy. It simply means you will need to consider filing Chapter 13 instead. Rather than discharging all your debts, Chapter 13 requires a monthly payment plan over three to five years. These payments are used to pay down your debts up to a certain percentage. The debts can then be discharged once you have fulfilled the repayment plan. 

How Can a Bankruptcy Attorney Help?

Considering filing for bankruptcy can be stressful. Taking the means test can add to that stress. Mr. Troutman is here to help unload some of that stress during this time. He will guide you through the process from start to finish and answer any questions you may have regarding the process. If you do not pass the means test, he will do whatever it takes to find the best possible solution for your situation. If Chapter 13 is necessary, he will work with you to develop an appropriate repayment plan that can help to significantly ease your financial burdens. 

Learn More about Qualifying for Bankruptcy

If you are considering filing for bankruptcy, contact our law firm online today to schedule a consultation with Mr. Troutman. If you prefer, you can call us directly. Our Portland office can be reached at (503) 597-1651, or call our Beaverton office at (503) 292-6788. Mr. Troutman can evaluate your financial situation and administer the means test to determine the best strategy for helping you start a new phase of financial stability in your life.

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Portland, OR 97204

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Beaverton, OR 97005

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