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What is a Means Test?

Qualifying for Chapter 7 Bankruptcy

If you are confronted with overwhelming debt, there are solutions for you. You may be considering filing for bankruptcy, or the many other alternatives to bankruptcy. If you choose to file for Chapter 7 bankruptcy, you will need to pass a means test - which is a process of examining your income and expenses to determine whether or not you are eligible for Chapter 7 or if Chapter 13 bankruptcy would be more suitable for your specific situation. This process involves a formula to compare your income to expenses to find out if you are able to pay back your creditors on a payment plan.

If the means test evaluation shows that you have a certain amount of 'excess' or 'disposable' income, you may not be eligible for filing Chapter 7 bankruptcy - and a Chapter 13 may be more appropriate. It is advised to discuss the bankruptcy process with an experienced Michigan bankruptcy attorney to discover what your best options are. The means test can be very complicated. The first step is analyzing your income. You will need to collect financial records such as pay stubs and bank statements from the last 6 months. If you are self employed you will need more detailed paperwork.

If you are below the median income level for Michigan, you would "pass" a means test and can file Chapter 7. The means test also allows for certain reductions to your gross income such as payroll taxes, allowed budget credits set by government guidelines, secured debt on your home, a vehicle, and other necessary expenses which can affect your gross income. So, even if you are above the median level, you may still qualify for a Chapter 7 filing.

Talk to a Bankruptcy Lawyer in Michigan

At Hensel Law Office, PLLC, I will work with you one on one personally throughout every aspect of your bankruptcy case, and help you work out the details and collect what you need for your means test should you need to complete one. I began my firm with the belief that my clients should not have to deal with several different attorneys and paralegals with regards to their circumstances but rather have a compassionate, understanding ally to help them through this difficult time. By applying my knowledge and experience, I have been able to help many clients achieve a brighter financial future. My firm provides legal guidance to those living in Warren, Sterling Heights and many other areas within the state of Michigan.

I look forward to assisting you, but first you must take the initiative to call the firm today.

Client Testimonials

  • He always responded quickly and intelligently.

    “Mr. Hensel made a difficult and uncomfortable situation as easy as possible for me. He always responded quickly and intelligently to my questions and never made me feel as if I were bothering him. He explained the unknown aspects of bankruptcy, the court system, and my options in clearly understandable terms. I felt confident that he was handling my case in the best possible manner and in my best possible interests. I feel lucky to have found the Hensel Law Office and I never hesitate to refer others who could use assistance - because I know they will get superior service and help.”

    Kelly

  • We have and will continue to recommend you to others in need of a fresh start.

    “Dear Tom, my husband and I wanted to express our deepest thanks for the help you gave us during our embarrassing and stressful time. I was very impressed that you returned every phone call in a timely manner. You were able to explain exactly what was going to happen in words that "we" could understand. You answered every question we threw at you. The whole bankruptcy process from start to finish was complete in the time you told us it would take. Your professionalism yet friendliness made the whole experience for us almost enjoyable... almost! We have and will continue to recommend you to others in need of a fresh start.”

    Melissa

  • Sincerest thanks for all of your help in affording me what I consider a real "fresh start."

    “I wanted to give you my sincerest thanks for all of your help in affording me what I consider a real "fresh start". My divorce was unfortunate but definitely a needed change for the better. However, the financial side of things still seemed to keep that past linked, which makes this an enormous weight lifted. I just can't believe the impact it's made on my outlook with...everything.I will be sure to keep your business cards handy to distribute along with highly favorable words of recommendation should the needs arise.Thank you again for your time and professional guidance.”

    Michelle

  • His knowledge and expertise made a very difficult time in our lives much easier.

    “From start to finish our experience with Mr. Hensel was great. He carefully and thoroughly explained the entire process to us and was always available for any questions or concerns we had. His knowledge and expertise made a very difficult time in our lives much easier. We are very thankful for his help in our situation.”

    Christine and John

  • He is respectful and down to earth with his approach to very complicated legal matters.

    “Hensel Law Office has helped me during a very difficult time in my life. Tom has done a wonderful job with my Chapter 13 case. He always kept in touch with me and explained everything in terms I could understand. I would highly recommend Mr. Hensel to anyone who is facing any bankruptcy filing. He is respectful and down to earth with his approach to very complicated legal matters.”

    Sandra