Means Test Exemptions

Measures taken under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) have limited the overall potential for debtors to file for Chapter 7 bankruptcy. However, the benefits of debt discharge may be available to certain debtors if they qualify for an exemption from the means test. As BAPCPA standards are primarily targeted at the reduction of bankruptcies due to consumer and personal debt, exemptions are largely provided for those with business-related debts.

If you are unsure whether Chapter 7 or 13 would be better for you or whether or not you qualify for your ideal form of bankruptcy, contact Birmingham bankruptcy attorney Paula Greenway by calling (205) 324-4000.

Non-Consumer Debt

When calculating totals for the means test, debtors are expected to measure their income against the state’s median income, which is eventually measured against the total amount of debt that needs to be repaid. However, those with certain types of debt may be able to avoid the means test altogether, allowing these individuals to have more control over which type of bankruptcy they want to file. The following exemptions are available:

  • Business debt

  • Personal tax debt

  • Debt incurred while on active military duty

 

If this non-consumer debt, which does not include problem debt such as credit cards or home mortgages, makes up more than half of a person’s total debt, the means test can be passed over entirely. These individuals are not necessarily suspected of the sort of abuse BAPCPA was passed to reduce, as consumer debt was originally feared to be the source of an overwhelming number of Chapter 7 bankruptcies.

Contact Us

If you are considering bankruptcy as a solution to your debt problems, there may be additional concerns or exemptions that can assist you. For more information that could help your bankruptcy case, contact the Birmingham bankruptcy lawyers at Greenway Bankruptcy Law, LLC, today at (205) 324-4000.

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