The Chapter 7 Means Test in Arizona

When filing Chapter 7 bankruptcy in the state of Arizona, the court requires individuals to complete a means test. The means test was brought in as a part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The means test is a way of ensuring that people are not abusing the option of filing bankruptcy for their debt. The means test also shows the court that Chapter 7 is the best option for the debtor.

The Means Test

The purpose of the means test is to compare the debtor’s monthly income and expenses to decide if granting Chapter 7 bankruptcy would be considered an abuse of the Bankruptcy Code. Official Form B122A-1 is the Chapter 7 Statement of Your Current Monthly Income. The form requests information about your gross monthly income for the last six months before the bankruptcy filing.

There are some types of income that will not need to be included in this. Things like social security benefits are not calculated within the means test. To pass the means test in the courts, you will have to have a gross monthly income that falls below the median income based on the size of your family in Arizona. Your debts should also not be primarily consumer debts. As long as the courts do not feel that you are filing Chapter 7 in bad faith and you pass the means test, you shouldn’t have a problem.

Presumed Abuse

You may still be entitled to a Chapter 7 bankruptcy even if your case is presumed to be an abuse of the Bankruptcy Code. The most common situation that falls under these pretenses is a misrepresentation of the income leftover on your means test. The most common cause is that the means test does not accurately represent your situation. If you cannot prove that the request to file Chapter 7 is not an abuse of the Bankruptcy Code, the court will give you a specific amount of time to convert to Chapter 13, or the case will end up dismissed.

Means Test Exemption

There are some circumstances where you might be able to get an exemption from the means test for Chapter 7 bankruptcy. This exemption requires that your debts are not primarily consumer debts or that you are exempt due to military service. Your bankruptcy lawyer will tell you if you qualify for an exemption for the means test under the Bankruptcy Code.

Official Form B122A-1Supp is the statement of Exemption from Presumption of Abuse Under §707(b)(2). Your bankruptcy lawyer will be able to provide you with the correct forms you will need to fill out. In most cases, the means test will need to be completed.

Arizona Bankruptcy Lawyer

If you plan to file Chapter 7 bankruptcy in the state of Arizona, you should also hire a skilled lawyer who practices bankruptcy law. Multiple forms are required for a bankruptcy proceeding in the state of Arizona. While you can take it on by yourself, that is not entirely advisable. Different circumstances can arise in a case, and having someone on your side that understands the legal ramifications of bankruptcy is an asset. So when you decide that bankruptcy is right for you, choose an Arizona bankruptcy lawyer to help you with your case.