What is the Means Test under the bankruptcy code?
The Means Test is a set of calculations used to determine whether a presumption of abuse exists for a Chapter 7 consumer debtor. Under the Means Test, the Current Monthly Income (CMI) of the Debtor is compared to the state median income. If a presumption of abuse exists, certain allowances and actual expenses are reviewed. This test determines whether a consumer debtor may file a Chapter 7 or is required to file a Chapter 13 instead. The Means Tests is also used in determining the Debtor’s disposable income for purposes of plan payments in Chapter 13. In Chapter 7, non-consumer debtors are exempt from the Means Test in they can show that their debt owed is primarily business related. For further clarification about filing for bankruptcy, please feel free to contact us and one of our bankruptcy attorneys in Miami will be happy to help you.
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