What are the exceptions to the means test for Chapter 7 bankruptcy?

When is it advantageous to file Chapter 7 bankruptcy?
What does Chapter 7 Bankruptcy entail?

Due to the nature of Chapter 7 as a liquidation bankruptcy, it necessitates the sale of your assets to repay your debts. If you possess no assets other than those that are exempt, filing Chapter 7 might prove advantageous. To gain further insights into exempt assets in the state of Florida, refer to The Homestead Exemption and The Motor Vehicle Exemption. However, if you are responsible for alimony, child support, criminal restitution, non-dischargeable taxes, or student loans, it may not be in your best interests to file Chapter 7 bankruptcy.

Veterans with disabilities who accumulated their debts during active duty automatically meet the eligibility requirements for Chapter 7 without having to undergo a means test. Moreover, if the majority of your debts are a result of a business closure, the means test does not apply.

Chapter 7 bankruptcy is the most common type of bankruptcy and is often referred to as a “liquidation bankruptcy.” Chapter 7 bankruptcy is used to eliminate, or discharge, primarily unsecured debts such as credit cards or medical bills. Chapter 7 does not eliminate secured debts, such as vehicles (unless the secured item is surrendered). Under the new bankruptcy law, only individuals who pass the “means test” may file a Chapter 7 bankruptcy. A knowledgeable bankruptcy lawyer can determine your eligibility and advise if Chapter 13 is applicable and of benefit for your specific situation.

Chapter 7 bankruptcy, also known as a straightforward bankruptcy, is a process through which the debtor’s assets are liquidated. The bankruptcy trustee takes possession of any non-exempt property and sells it to generate funds for distribution among the creditors. Typically, the debtor is granted a discharge of all eligible debts in about four months. In most cases, the debtor does not possess assets that would be forfeited, thus Chapter 7 offers a relatively swift opportunity for a “fresh start.”
One of the primary objectives of Bankruptcy Law is to provide individuals burdened by insurmountable debt with a new beginning by eliminating their debts.