Chapter 7 “Means Test”
- Dismissal for “Abuse” – abusive Chapter 7 cases are subject to dismissal
- The “means test” involves a computational test – (involving income and expenses) to determine whether a person’s case is presumed to be abusive.
- Failure to pass the “means test” – presumption that case is abusive
- Income used in the means test is based on the six month period prior to the month of the filing of the bankruptcy case.
- Expenses used in the means test are based on IRS collection standards and actual expenses. The application of the “means test” is often quite complex.