Can you file Chapter 7? That depends on many factors, including whether you can pass the Means Test.

In a Chapter 7 case, you are not required to pay back the eligible debts included in your filing that are discharged by the court. To keep people from abusing this power, anyone wanting to file Chapter 7 must first pass the Means Test. Fortunately, you won’t need to study for the means test, and your lawyer may even help you.

The Means Test isn’t an exam. It is more of a measure of your income and debt. In most cases people pass and are able to file if their income is below the median level for your state.

The median income varies based on where you live and the size of your family, so the standards vary. In some circumstances, you may still be able to file if your income is above this level, but you may want to discuss this with a Chapter 7 lawyer if this is the case.

Remember that the Means Test isn’t meant to prevent those struggling with debt from filing for Chapter 7. The main intent is to keep people from abusing the system. In fact, even with the Means Test in place Chapter 7 is still overwhelmingly the most common type of bankruptcy. More than 70 percent of all personal filings are Chapter 7.

Do you qualify for Chapter 7 and is it right for you? Get the answers to these questions before you fully commit to filing. A bankruptcy attorney may answer your questions and provide specific information about your case. Then, make an informed decision about your future.

Today, anyone attempting to claim Chapter 7 bankruptcy has to show that an undue financial hardship will result if the loans in question are not discharged. Since in a lot of cases with filing bankruptcy and student loans make up a very large portion of the individual’s debts, it is possible that a portion of the loan may be discharged by the judge, but in most cases a large proportion of the loan will still remain as a legal debt. In some other cases when filing bankruptcy and student loans are reviewed, if the loans are found to have been sold on multiple times to other lenders and with changing interest rates it can be very difficult to determine an exact balance, in these cases, if you’re lucky some or all of the loan could be discharged.

Abiding by the provisions of Chapter 13 bankruptcy, it is possible for a debtor to have arranged all of their unsecured and secured debt to become part of a repayment plan through the services of a court trustee. In these cases of bankruptcy and student loans happen to be included; the person has to meet specific criteria, for example: showing that they do indeed have the sufficient amount of capital available to make the monthly payments determined by the court to pay off their total debt within a five years period.

Proving the debtor has the capital to pay

He’s an example: if someone has a total outstanding debt filed in bankruptcy court of say $100,000, the trustee will them divide the $100,000 total by 60 months (5 years) to come up with a monthly payment of $1,667. If that someone can actually show that they do indeed have earning of that amount plus the necessary capital living expenses, it may be possible for them to file Chapter 13 bankruptcy and student loans could be included in the amount.

Having said that, if someone’s capital each month does allow for all their expenses counting the payment to the court, Chapter 13 won’t be allowed. Another option could be to file Chapter 13 bankruptcy to get rid of most of their other debts, thus freeing up funds to be able to pay the student loans. For a lot of people filing bankruptcy and student loans payments afterwards will put a big dent in their income, but with any luck after a period of time, it may be possible for them to secure a loan with lower interest rates and lower payments to pay off their student loans.

So filing bankruptcy and student loans don’t always mix well, but it’s not impossible to do in some cases. If you think you have a chance and you have been advised that bankruptcy is the right option for you, then you can give it a try, but like as always treed carefully, bankruptcy is serious business.