Introduction To The Means Test

Introduction To The Means Test

Most individual debtors filing for bankruptcy relief are required to complete a version of what is commonly referred to as the “means test” prior to filing their case. The means test calculation is crucial in determining whether a debtor may qualify for a chapter 7 bankruptcy filing.

This calculation is made using a version of Bankruptcy Form 122. The following are designed for use in chapter 7 cases:

  • Official Form 122A-1 (Chapter 7 Statement of Your Current Monthly Income),
  • Official Form 122A-1Supp (Statement of Exemption from Presumption of Abuse Under § 707(b)(2)), and
  • Official Form 122A-2 (Chapter 7 Means Test Calculation) (collectively the “122A Forms”)

The following are designed for use in chapter 13 cases:

  • Official Form 122C-1 (Statement of Your Current Monthly Income and Calculation of Commitment Period)
  • Official Form 122C-2 (Chapter 13 Calculation of Your Disposable Income) (collectively the “122C Forms”)

These forms contain minuscule print and resemble tax forms in appearance. They require an extensive review to understand what is necessary for their accurate completion. A bankruptcy attorney is indispensable in helping debtors understand and complete the means test forms correctly.

Debtors who wish to file a Chapter 7 bankruptcy case must complete the means test unless their income is below the Utah median for their household size. If this is the case, they are exempt from the test and may file a Chapter 7.

However, If debtors have income that is higher than the Utah median, debtors must “crunch the numbers” and make the means test calculation to determine if they have the ability to repay a portion of their unsecured debts in a Chapter 13 bankruptcy. This is typically a very complicated and lengthy task which requires the assistance of an experienced and knowledgeable Utah bankruptcy attorney.

If a person’s debts are not primarily consumer debts, then he is exempt from the means test. Potential debtors also exempt from the means test are disabled veterans and servicemen who have incurred their debt primarily during active duty or while performing a homeland defense activity.

Correctly calculating all of a bankruptcy debtor’s relevant income and expenditures to meet the requirements of the means test may require a complex legal analysis. Theron Morrison and his team of attorneys at MLG can help anyone with this complicated but necessary evaluation.

Talk to the Morrison Law Group about how you may qualify for a Chapter 7 or Chapter 13 bankruptcy case. Call 801.456.9933 today to schedule a FREE consultation. We have locations in Ogden, Logan, Sandy, and St. George to serve the residents of the counties of Weber, Cache, Salt Lake, Utah, Morgan, Davis, Washington, and surrounding areas.

Theron Morrison

Theron Morrison

Utah’s top bankruptcy and consumer protection attorney.