What’s the NJ Bankruptcy Means Test and What Does It Mean to You?

There are many good reasons to consider filing for bankruptcy, not the least of which is giving yourself the chance to get back on the road to good financial health.

However, before you can file for Chapter 7 bankruptcy protection, you must pass the NJ Means Test. The Means Test is a measure of whether you make enough money to be able to pay back a portion of your unsecured debt.

The Means Test is a necessary part of the process, unless your income falls below the New Jersey median for household income/size. If it does, you won’t have to pass the Means Test to file for Chapter 7. You will also be exempt from the Means Test if you are a disabled veteran who incurred debt while in the military.

Your household income is calculated by averaging the total monthly income for all members of the household over the past six months. It’s important to note that if you believe your income is going to drop in the next month or two, you can wait to take the Means Test until your monthly income is less. The total calculation will be lower at that point.

Take the monthly median amount from the past six months and multiply by 12 (to account for a year of income) and you will have your household income.

Household Income Must Be Below These:

  • 1 Member Household – $60,317.00
  • 2 Member Household – $70,150.00
  • 3 Member Household – $85,575.00
  • 4 Member Household – $103,946.00
  • 5 Member Household – $112,046.00
  • 6 Member Household – $120,146.00
  • 7 Member Household – $128,246.00
  • 8 Member Household – $136,346.00
  • 9 Member Household – $144,446.00
  • 10 Member Household – $152,546.00

Once you know your household income, you must calculate your allowed expenses.  Subtract your expenses from your household income to determine the amount you would have available to pay back unsecured creditors in bankruptcy. Speak to a qualified bankruptcy attorney about your eligibility for Chapter 7 bankruptcy protection.

An experienced NJ bankruptcy attorney at Garland & Mason, L.L.C. will review your Means Test results, discuss your options for bankruptcy and guide you through the process from start to finish. Call today to get started down the road to better financial health.



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