When people think of filing for bankruptcy in Connecticut, the first thing that comes to mind is Chapter 7 bankruptcy. This type of bankruptcy is often considered the “gold standard” because it allows people to discharge their debts and start over fresh. When filing for Chapter 7 bankruptcy, however, you have to pass a “means test.”
What is the means test?
The means test is a way for the court to determine whether or not you are eligible for Chapter 7 bankruptcy. It is based on your income and expenses. If your income is below the median income for your state, then you will automatically pass the means test and be able to file for Chapter 7 bankruptcy. However, if your income is above the median income, then you will have to pass a more detailed means test.
The means test sections
There are two parts to the means test. The first part of the test looks at your “current monthly income.” This is your average income over the last six months. The second part of the test looks at your “disposable income.” This is the amount of money you have left over after paying for your basic living expenses.
To calculate your disposable income, the court may look at your income and expenses. If you have a lot of disposable income, then you may not be able to file for Chapter 7 bankruptcy. There are a few exceptions to the means test. For example, if you are a disabled veteran, you may be exempt from the means test.
Filing for bankruptcy can feel like a daunting task, but it doesn’t have to be. If you’re considering filing for Chapter 7 bankruptcy, it’s important to make sure you understand the means test. With a little bit of knowledge, you can make the process a lot less stressful.