Chapter 13 Bankruptcy and the Means Test
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Chapter 13 Bankruptcy and the Means Test

Filing for Chapter 13 bankruptcy does not require passing a means test, the way that Chapter 7 bankruptcy does. However, from the pre-filing requirements that a filer needs to meet, to the filing itself and the court process, there are steps that go into a typical Chapter 13 bankruptcy filing.

Many people file for Chapter 13 as a way to reorganize their debts while keeping the property they want to hold on to. This can include homes, as filing for bankruptcy may halt the foreclosure process, as well as cars, boats and other property that might be liquidated in a Chapter 7 bankruptcy case. Often Chapter 13 bankruptcy can work well for those who have regular income coming in, and it's often called the wage-earner's plan.

If you have more questions about the bankruptcy process, what it takes to file for Chapter 13 bankruptcy, and what might be the right option for you, connect with a local bankruptcy attorney. A bankruptcy attorney could be your resource, answering your questions and guiding you through the bankruptcy filing process. Simply fill out the form below to get started today.


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The Bankruptcy Means Test

Some people file for Chapter 13 bankruptcy because they don't meet the requirements needed to file for Chapter 7 bankruptcy. The Chapter 7 means test, as it is called, applies a formula in part to determine whether an individual can afford to repay a portion of debts in Chapter 13 bankruptcy.

Those who aren't able to make regular repayments may qualify for the Chapter 7 bankruptcy option. The Chapter 7 bankruptcy plan calls for unsecured debts to be discharged, while other property is sold and the proceeds are used to make partial payments to creditors.


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Chapter 13 Bankruptcy Repayment

The Chapter 13 bankruptcy repayment option typically involves making a plan to post payments on outstanding debts to creditors on a regular basis, over the course of 3 to 5 years. In this way, a short term financial setback can be alleviated over a longer period of time.

One benefit of this process is that a bankruptcy filing initiates what is called the automatic stay. This legal process requires that creditors stop pursuing debtors asking for payments and can halt the foreclosure process. This often provides the kind of financial breathing room that a lot of people are looking for as they consider bankruptcy.

Talk to a Bankruptcy Lawyer

The bankruptcy process can be financially liberating, but there are steps that can be taken to avoid problems with the filing. A bankruptcy attorney may be able to help you avoid these problems, to file the necessary forms and take the necessary steps. Fill out the form below, and we can connect you with a local bankruptcy lawyer for a free case evaluation.


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