By: Jeena Cho

The Means Test was a new rule passed with the 2005 Bankruptcy Amendment requiring that all above median debtors complete and “pass” the test. It was supposed to prevent abuse of the bankruptcy system by making it more difficult for people to qualify and file Chapter 7 bankruptcy. The principal idea being if you make above the median income for your state, you should be required to repay some of your debt in a Chapter 13 bankruptcy.

For a single person without dependents (household of 1), the median income in California is $47,969. Everything is obviously much more expensive in the Bay Area and many people make much more than the median income. Now, you may be thinking to yourself, I make more than that so I have to file for Chapter 13 bankruptcy. Well, not always. If you make above the median income, it just means Continue Reading »