The median income test is bankruptcy rule that states that if a debtor's median family income is at or below the state's median family income for a family the same size as the debtor's family, the debtor can receive Chapter 7 relief.

Question

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This is the correct definition of the median income test for bankruptcy. If a debtor's median family income is above the state's median family income for a family the same size, they may not qualify for Chapter 7 relief and may be required to file for Chapter 13 bankruptcy instead.

The Median Income Test Is Bankruptcy Rule That States That