Denver, Colorado, Bankruptcy Lawyers
SHARON W. GROSSENBACH, Attorneys at Law

One of the first steps in the bankruptcy process is taking a bankruptcy means test. The results of this test will help determine whether you can qualify for Chapter 7.

What Is the Bankruptcy Means Test?

The bankruptcy means test determines your eligibility to file for Chapter 7.  Your eligibility is based on your annual household income from the past six months. If you are below the median income for a household of your size, then you automatically qualify to file for Chapter 7 (if that is your best option). If you are over the median income for a household of your size, you may still qualify for Chapter 7, but you must pass the long form means test, which takes other factors into consideration, such as whether your income was from a one time distribution, or is not expected to continue. If you are above the median income level for a household of your size, and are not able to qualify based on the long form means test, then Chapter 13 may be your only bankruptcy option.

When you decide to file bankruptcy, it is necessary to take a bankruptcy means test to determine whether or not you easily qualify to file Chapter 7, or would be required to file a Chapter 13. The type of means test you must pass is based on your household's median income level. If your household income is under the median income for your household size, then you can take the short form means test, and you automatically qualify for Chapter 7 relief. The means test can be complicated. This firm will be able to assist you with this test, and will help determine which is the best option to meet your financial needs.

What Is the Median Income?

The median income changes regularly. As of March 15, 2010, the median income level for Colorado is $47,085 for a single person household and $81,354 for a four person household, as reported by the U.S. Department of Justice. To see the most up-to-date information, please visit the DOJ Web site and/or view the median income table.

Contact a Personal Bankruptcy Attorney

Regardless of whether you file for Chapter 7 or Chapter 13 bankruptcy, the lawyers at Sharon W. Grossenbach, Attorneys at Law, will guide you through the process and help you achieve the debt relief and financial freedom you need.

Contact our firm for a free initial consultation. Principal attorney Sharon W. Grossenbach is a board certified bankruptcy lawyer.