The bankruptcy means test was implemented as a result of 2005 changes to the bankruptcy code. Creditors were complaining about the large number of individuals who were abusing the bankruptcy system to avoid paying off their debts, despite having the means to do so.
The purpose of the bankruptcy means test is to determine whether a person truly needs to declare bankruptcy.
The good news is that if your income is less than the median income for the state in which you are filing, you will not be subjected to any additional financial analysis. For bankruptcy purposes, one's income is calculated as follows.
Take everything you've earned in the past six months, including gifts, inheritance, tax refunds, and wages... essentially everything except Social Security and compensation for being a victim of terrorism or conflict. After adding everything for the previous six months, double that sum.
This is your earnings. If it is greater than the state median, you will be required to provide documentation of your income and expenses. A judge may then determine that you should petition for chapter 13 rather than chapter 7 bankruptcy. Chapter 13 does not, unlike chapter 7, discharge debt. Instead, it establishes a manageable payment plan for you based on your income, with creditors often agreeing to waive fees and interest. However, the debts must still be repaid.""
" - https://www.affordablecebu.com/
