What is the Means Test for Chapter 7 Bankruptcy in Arizona?

You’ve finally decided that you want to file bankruptcy. You go to see an attorney for bankruptcy in Arizona and pay your consultation fee. A week or two later, it’s time to fill out the means test form. When you do, it shows that you have more than enough to pay all of your debts with plenty of money left over at the end of the month. Where does this leave you, and what should you do next?

The Court Wants to See How Badly You’re in Debt

The reason the court has you fill out the means test is to find out if you truly need financial rescue. The idea of running up a bunch of debt and then filing a bankruptcy to make it all go away doesn’t sit well with some people. It certainly doesn’t sit well with a lot of politicians. This is why the laws have made it harder and harder for people to qualify for Chapter 7 bankruptcy.

Your Attorney for Bankruptcy in Arizona Can Assist You

Completing the means test can be confusing. Thankfully, your attorney for bankruptcy in Arizona can help you do this. They’ll have a software program that allows them to plug in the information and find out where you stand. It’s important that you be 100% honest when you fill out this form. If you lie or exaggerate about how much you make or how much your monthly bills are, the bankruptcy trustee will find out. When they do, they’ll dismiss or reject your bankruptcy petition. In addition, they may decide to pursue bankruptcy fraud charges against you.

How Does the Test Work?

The means test is what the U.S. Bankruptcy Trustee is going to use in order to determine whether your bankruptcy petition should be approved. This test essentially lets the court know how close to the poverty line you and your family are. The general rule is that your income must be less than 150% of the poverty line in order to qualify for a Chapter 7 bankruptcy. The test looks at your net income and accounts for any monthly bills you must pay.

This is best illustrated with an example. Imagine that you make $48,000 per year. This is roughly $4,000 per month before taxes. After taxes, for argument’s sake, let’s say you have about $3,000 every month to live on. Once you pay your mortgage/rent, utilities and food, you have about $1,000 per month left. If the courts feel that this is more than enough for you to comfortably repay your debts, your bankruptcy isn’t going to be approved.

Let Your Attorney for Bankruptcy in Arizona Help You Complete Your Petition

In case you’ve never filed bankruptcy, it’s important to know that it involves over 50 pages of forms. Yes, that’s worth saying again. A Chapter 7 bankruptcy in Arizona entails more than 50 pages of forms and attachments. The petition is made up of the main application along with a bunch of things called schedules. Your attorney for bankruptcy in Arizona knows what every form is used for. While you’re perfectly able to tackle this endeavor on your own, it may not be the wisest thing to do. If you forget a certain form or schedule, your bankruptcy will be rejected. If you make a calculation error on the means test or assets/debts schedule, your petition will be rejected. Depending on how far along in the process you are, this could mean that you must refile and pay the filing fee of $338 all over again. Rather than risk this happening, call and retain the services of an attorney for bankruptcy in Arizona right away.