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Means Test
  The means test was made law by the bankruptcy law changes enacted in October, 2005. The test provides a uniform method to determine a debtor’s ability to repay his or her debts. It is based upon the same method used for tax collection by the Internal Revenue Service. The basis of the test is to compare the debtor’s income and expenses to averages for other individuals in a specific geographic area, e.g., Orange County, Florida. These averages vary depending upon the size of your household and are revised periodically.

Current Income Limits
 

 Family Size  Median Income
 1  $ 42,468
 2  $ 53,939
 3  $ 60,162
 4  $ 71,124
 Additional person  $   6,900

If your gross income is less that the median income listed above, you can meet the means test and file a Chapter 7 bankruptcy .   Even if your income is higher, you can still pass the means test.   Certain expenses are allowed, which will reduce the amount of income you have available to repay your creditors.

The means test only applies to debtors with consumer debt.  If your debt is primarily business debt, you do not have to pass the means test.



  If you would like a complete analysis of your financial situation, please contact Orlando Bankruptcy attorney, Randy Maddox .



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