Some debtors who file for bankruptcy may prefer liquidation under Chapter 7 but, due to the means test, may be required to file under________ of the Bankruptcy Code, which provides for "Adjustment of Debts of an Individual with Regular Income."

Question

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Chapter 13 of the Bankruptcy Code is designed for individuals with regular income to adjust their debts, unlike Chapter 7, which involves liquidation. The means test determines if a debtor has enough disposable income to repay some debts under a reorganization plan, leading them to file under Chapter 13 instead.

Some Debtors Who File for Bankruptcy May Prefer Liquidation Under