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Attorneys can help demystify the Chapter 7 means test

Many life events may have led up to a person's decision to declare bankruptcy. Often, these events are outside the individual's control, so it is good that there is a way he or she can discharge many of his or her debts and start over with a clean financial slate. However, individuals in Tennessee who want to file for bankruptcy may be very confused about how to do so. One question they may initially grapple with is whether to claim Chapter 7 or Chapter 13 bankruptcy.

In general, in a successful Chapter 7 bankruptcy, most of an individual's debts are liquidated. In a Chapter 13 bankruptcy, an individual enters into a court-ordered, time-limited repayment plan. If all payments are made in full and on time, most of the remaining debts will be discharged. However, there are different qualifications for each type of bankruptcy.

For an individual to qualify for Chapter 7, he or she needs to pass what is known as the "means test." The means test first considers whether or not an individual's debts are primarily categorized as consumer debt. Following that determination, the individual's household income is taken into account. In general, if an individual's total household income is less than the median income level, the individual will meet the means test and can pursue Chapter 7 bankruptcy.

If an individual's total household income is more than the median income level, then he or she may still be able to pursue Chapter 7 bankruptcy if certain aspects of the means test are met. Moreover, sometimes there may special circumstances that allow a person to pursue Chapter 7, even if they do not pass the means test.

If an individual wants to file for bankruptcy in Tennessee, be it Chapter 7 or Chapter 13, it may be a good idea for him or her to have help in doing so. Filing for bankruptcy is complex, so it can help to have a professional at your side, to make sure no important aspect is overlooked. Since 1988, attorney Kenneth Rannick has helped individuals in Tennessee file for bankruptcy so they can get a fresh financial start. His webpage on the means test may provide individuals with more information about this important aspect of a bankruptcy filing and illustrate why having the assistance of a skilled attorney can be beneficial.

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-624-4002
Toll Free: 800-257-7594
Fax: 423-624-0509
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