Why in the world would anyone take the Bankruptcy Means Test alone? Do It Yourselfers Beware.

The Means Test struck terror in the hearts of millions when it was introduced in 2005 as part of Congress' rehaul of the bankruptcy laws. Bankruptcy lawyers everywhere wondered if it would be the death toll of debt relief and their law practices. As it turns out, the means test worked out pretty well in the end, once all the kinks were worked out. It was designed as a sort of threshold test to weed out people who, in theory, actually can repay all or part of their debt. It kicks people out of Chapter 7 who should repay at least part of their debt, and can impact how a Chapter 13 is structured for those repaying debt in bankruptcy. 

I have seen means test calculators and the like popping up in order to help those who want to help themselves or who just want to get a flavor for whether or not they qualify before actually talking to a bankruptcy lawyer. Nonetheless, I am concerned for those folks and here's why.

The Means Test is not a checklist. It is not just another form. There are whole seminars for bankruptcy lawyers devoted to how to correctly apply the means test. The first time I sat in one, people walked out with stomach aches. Many bankruptcy lawyers decided to do something else. Its not that bankruptcy law went down the tubes, it was just that as straightforward as the "form" might look, it is subject to nuances and interpretations. The courts have spent years (and its ongoing) clarifying the means test and how it should properly be applied. As an example, it asks for "household income". If you live alone or have a spouse, its pretty straightforward. But what if you have a roommmate or a boarder? What if you have a live in significant other or are living with relatives? Once we know who counts, there is the question as to how income is actually calculated for purposes of the test. See what I mean? Get that one wrong and the test can give you the wrong "answer". I've talked to many a people who say "I took the means test a year ago online, and figured I didn't qualify so I kept struggling". Come to find out they did it wrong. Or maybe they don't qualify but didn't know that they may have other options. 

I understand that many people wake up in the middle of the night worried about their debt and hop online to try to figure it out. Bleary eyed and inexperienced, they rely on an internet tool to determine their fate. They want an answer NOW so that they will know one way or the other if they should even contemplate filing for bankruptcy. I get it. But don't solely rely on some online test and then call it quits. Talk to a bankruptcy lawyer instead.

With offices in Schaumburg and Itasca, we help people all over Chicago and the outlying suburbs who are looking for debt relief, even if they aren't sure yet what they want to do. Call us at 630 250-8813 to set up a no obligation confidential appointment. 

Carol O'Connor Cadiz
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Attorney & Owner at O'Connor Cadiz Law: Injury & Accidents, Disability Insurance.
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