The Means Test Tells Cameron Park Resident if they May File Chapter 7

The other day a client from Cameron Park was in my Sacramento area office. She
had questions regarding whether she qualified for bankruptcy. As a bankruptcy
lawyer, one of the things I consul clients on is whether they qualify for Chapter 7.

Income Above or Below State Median?

If your income is below the California median, then you may simply file for Chapter
7. But if, like some of my clients and, you earn more than the median, then you’ll
need to pass the means test to file for Chapter 7.

Brief Explanation of Means Test

With the means test, you are trying to see if you have enough disposable income
as paying certain monthly expenses to pay at least some of your unsecured debt.
Because under Chapter 13 you can take five years to payoff your debt, a projection
regarding your income, allowed expenses and debts is made for that period.

Basically, if it’s deemed that you have enough disposable income that you’ll be able
to payoff at least some of your unsecured debt, then you have failed the means test
and will have to file Chapter 13.

Passing the Test

If you pass the test, as it looked like my client from Cameron Park would after I ran
the figures, then the rest of the bankruptcy process takes about two to four months.

Please contact our bankruptcy offices in Sacramento, San Francisco, Santa Clara, and
San Francisco California, at info@california-bankruptcyattorney.com or at 888-589-
1977 if you have any questions regarding bankruptcy.