Means Test in Dupage County

To file Chapter 7, you must first pass a means test. Bankruptcy law was designed to give protection under Chapter 7 to those who need it most. Under old bankruptcy law, the courts had considerable discretion to determine who was eligible to file. Congress passed the Bankruptcy Protection Act of 2005 to establish an objective, consistent standard of eligibility. That standard is the means test. At Joseph P. Doyle, our Dupage County bankruptcy attorneys can help you determine if you qualify to file for Chapter 7, and which type of bankruptcy is the best option for you.

Dupage County Means Test: Eligibility for Chapter 7

The means test is a two-step eligibility process. In the first step, your income is compared to the median income for a family of the same size in your state. As of April 1, 2013, the median income in the state of Illinois is $47,485 for an individual filer, $59,861 for a family of 2, $68,721 for a family of 3, and $80,776 for a family of 4.

If your income does not fall below the median, you will go to step 2. In the second step, your "disposable income" is calculated by deducting from your income certain allowable expenses, classified as necessary by the IRS. The amount of your disposable income will determine if you are eligible to file Chapter 7. Many people who wish to file are eligible.

Exclusions to the Means Test

There are very few exceptions to the means test requirement. Disabled veterans with a disability rating of 30 percent or more, who incurred more than half their debt during active military duty or homeland defense, can file Chapter 7 regardless of income or expenses. The means test does not apply when most of an individual's debt was incurred through operating a business. Contact our Dupage County bankruptcy lawyers for a free initial consultation.