Which of the following is true of the median income test?
A) If a family has median family income equal to the state's median family income, the debtor does not qualify for a Chapter 7 bankruptcy.
B) If a family has median family income below the state's median family income, the debtor is subject to the "means" test.
C) If a family has median family income below the state's median family income, the debtor automatically qualifies for a Chapter 7 bankruptcy.
D) A debtor's debts are not discharged if the family median income is more than the state's median family income.

Question

Quizplus · Accepted Answer

If a family has median family income below the state's median family income, the debtor automatically qualifies for a Chapter 7 bankruptcy. This is because being below the state median income level is seen as an indicator that the debtor may not have sufficient means to pay off debts, making them eligible for Chapter 7 bankruptcy, which involves liquidating assets to pay off debts.

Which of the Following Is True of the Median Income