When you find yourself in dire financial straits, bankruptcy may be the best way to resolve your situation. The preferred form of bankruptcy for most Massachusetts residents is Chapter 7. It is relatively fast and in many cases allows you to keep some of your possessions. Unfortunately, the bankruptcy means test deters some people from considering this as a remedy.

Learning how the bankruptcy means test works can relieve some of the anxiety you feel about the process. An experienced attorney can provide you with comprehensive details about the test that are significant to your circumstances. To start learning on your own, please review the following facts about the means test.

Bypassing the test: Some groups of people are automatically exempt from the means test. For example, some disabled veterans may bypass the test and so can some people who accrued their debt while operating a business.

Income sources: The first portion of the means test involves comparing your average income per month for six months before filing against the state’s median family income. Several examples of income sources include wages, business income, retirement funds, spousal support, disability insurance and income related to real estate holdings.

Disposable income: If it turns out that the first part of the test disqualifies you from Chapter 7, you still have a chance to file this form of bankruptcy. The second part of the test will look at any disposable income you have after your expenses. If you have enough to pay down some of your debt, you will not be eligible to file Chapter 7. However, you will probably be able to file Chapter 13 instead.

Regardless of your income and your expenses, there is most likely some form of bankruptcy that will meet your financial needs. Your lawyer can guide you in making the best choice for your unique situation.