If you are in a bad economic way with little hope of seeing improvement without help, you are not alone. Many New Jersey residents have been where you are. If you are thinking about pursuing a Chapter 7 bankruptcy but are not sure if you qualify, there is a simple way you can find out -- take a means test.
A Chapter 7 bankruptcy filing, if approved, can clear most -- if not all -- of your debts. Sounds like a good deal. However, this is not something offered to just anyone. There are qualifying factors that you must meet. This is where the means test comes into play.
The means test - what is it exactly?
The means test is a set of forms known as 122 forms. These you can get online or by seeing a bankruptcy attorney.
The purpose of the means test is simple: to determine Chapter 7 eligibility. To take a means test you will need to look up some information about your income level and the state's median income level. Gathering this information requires going through your own personal records and by reviewing the most recent census data.
Okay, after taking the test you'll have a page full of numbers. What do they mean?
If the state median income is higher than your income level, it means that you may pursue a Chapter 7 bankruptcy filing. If, however, the state median income is lower than your income level, a Chapter 7 filing may be out of reach. In such cases, it will all come down to your disposable income. If you make too much but your disposable income is insufficient to meet your debt obligations, you may still qualify for a Chapter 7 bankruptcy.
Seek financial freedom
Confused? Have more questions? That is okay. Bankruptcy law can be quite confusing. Thankfully, this is not a process you must go through alone.
Wanting to free yourself from debt is a desirable goal. Sometimes, in order to do that, extraordinary measures are required. While no one really wants to pursue a Chapter 7 bankruptcy, it may be the best option and, if approved, can grant the financial freedom you desire. With legal assistance, you can review your economic situation, fill out the means test accurately and then pursue the debt relief options that best fits your needs.