The Chapter 7 means test for Mississippians

Mississippians in need of debt relief have several legal options at their disposal. By taking the facts of their financial situation to a bankruptcy attorney, individuals can learn more about which route may be best for them. If personal bankruptcy is appropriate, debtors may be interested in learning more about Chapter 7 bankruptcy.

Sometimes known as strait bankruptcy, this type of solution typically involves liquidation of certain assets and discharges of many debts. Since Chapter 7 for individuals can offer significant debt relief, many Southaven residents will want to know if they qualify.

One important aspect of being eligible to file for Chapter 7 is being able to pass the means test. The means test involves determining where a debtor's income is in relation to the state's median income for a household of the same size. In Mississippi, the median income is $35,784 for one person for cases filed on or after April 1 of this year. For a household of two people, the median income is $44,832; for a family of three it is $47,339, and for four or more people it is $59,126. If a debtor's income is below the state median, they are generally able to consider filing for Chapter 7.

It's helpful to know that even those who have incomes higher than the state average are potentially still able to file for Chapter 7. Since Chapter 7 eliminates many unsecured debts, it is an attractive option for debtors, and it can pay to learn more about one's eligibility for this type of bankruptcy. A bankruptcy attorney can help a debtor understand the implications of the means test and can also prepare the individual's income statements and schedules.

Source: The United States Department of Justice, "Census Bureau, IRS Data and Administrative Expenses Multipliers," accessed April 26, 2015

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