The Means Test in Murrieta
Murrieta Bankruptcy Lawyers
Thinking about pursuing Chapter 7 or Chapter 13 bankruptcy in Murrieta? If so, it is important that you are aware of the steps that are involved in the bankruptcy process. One such step is taking and passing the state of California's means test. In order to learn more about the state's means test and how it will impact your bankruptcy petition, it is advised that you contact a Murrieta bankruptcy attorney today and set up a free case evaluation!
Logic Behind the Means Test
In the state of California, before a person can file for consumer bankruptcy, he or she must take a means test. The means test is an investigative process where a person's income and debts are reviewed and assessed. This assessment is meant to determine whether or not people can file for bankruptcy. It is also meant to determine which type of bankruptcy people are eligible for.
The main goal of the means test is to keep high income filers from pursuing Chapter 7 bankruptcy, which is more appropriate for low income filers. It is assumed that if people have substantial income, they can reorganize their finances and repay their creditors over a period of 3 - 5 years. Therefore, individuals with higher incomes will have to file for Chapter 13 instead of Chapter 7, which allows them to discharge their debts.
When people take the means test, their income is compared to the state's median income. If their income exceeds the state's median income, they will not be eligible for Chapter 7 bankruptcy. They will, however, have the chance to file for Chapter 13 bankruptcy if they are capable of coming up with a repayment plan to pay off their debts to creditors over time.
Securing Your Legal Assistance
As you can see, passing the means test is an important part of the bankruptcy process and can present challenges to consumers. For this reason, people are encouraged to work with an experienced bankruptcy attorney from Singleton Smith Law Offices as we are very familiar with this process and can provide immediate assistance.
Contact a Murrieta bankruptcy lawyer from our firm today to get started!