A means test is used to determine whether ________.
A) the debtor's median family income is less than the state's median family income
B) the debtor's median family income is more than the state's median family income
C) the debtor has the capability to pay prepetition debts out of postpetition income
D) the debtor would qualify to file for bankruptcy under Chapter 13

Question

Quizplus · Accepted Answer

A means test is used to determine whether the debtor has the capability to pay prepetition debts out of postpetition income. The purpose of this test is to determine whether the debtor qualifies for Chapter 7 bankruptcy or whether they have to file for Chapter 13 bankruptcy, which requires a repayment plan. The means test compares the debtor's income to the state's median income to determine eligibility for Chapter 7 bankruptcy. If the debtor's income is too high, they may not be eligible for Chapter 7 bankruptcy and must file under Chapter 13 instead.

A Means Test Is Used to Determine Whether ________