What is the Means test and how does it work?
June 29, 2022
By Diane Drain Attorney & Retired Law Professor
In Chapter 7 FAQ, the means test was discussed. A change in the concept of “disposable income” in Chapter 13 makes things more difficult. §1325(b)(2) Official form B22C is used. The difficulty is that under either the 7 or 13 median income approach, the disposable income criteria will not be an accurate indication of future ability to pay the Plan payments. The test is a retrospective rather than a prospective examination. Charitable contributions, up to 15% of gross income, are included 1325(b)(2)(A)(ii), in addition to other deductions. Our firm will provide you with a means test calculation form and explain how it works.
About the Author: Diane Drain
Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
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