Written by Craig D. Robins, Esq.
Since the bankruptcy laws were changed in 2005, Chapter 7 eligibility is no longer guaranteed. Debtors must demonstrate that they are qualified to file a Chapter 7 petition by showing that they pass the means test.
The means test is a comprehensive, extremely complex series of calculations that the federal government designed to ascertain whether a consumer qualifies for Chapter 7 filing. This is the first item the Office of the United States Trustee will look at when reviewing a new case, and it is usually the first thing a Chapter 7 trustee will look at as well.
Having experienced bankruptcy counsel to prepare the means test may make the difference between passing it or failing it. An experienced bankruptcy attorney will know what expenses and deductions are permissible and where the bankruptcy court stands with interpreting the means test law.
To date, there have been hundreds of bankruptcy court decisions from around the country, written in the past three years, analyzing the 2005 Bankruptcy Amendment Act. These cases state how the law should be applied in ascertaining if a debtor has completed the means test properly. Obviously, it can be critical for bankruptcy counsel to know the current state of the law when analyzing a client’s case.
The attorneys in my firm regularly review the latest bankruptcy court decisions. I have written extensively about many of these cutting edge cases on this blog. When choosing a New York bankruptcy attorney, consider one who has the experience necessary to ensure that the means test is done right.