One of the things that prevents people from even considering bankruptcy as the solution to their financial issues is the idea that they will be subjected to a Mean’s test. The good news is that, in certain situations, debtors are not required to take part in one. Keep reading to learn about this and then contact The Law Offices of Paul Y. Lee at 888-748-0025 if you would like a free bankruptcy consultation.
It Depends on Whether or Not Your Debt is Primarily Consumer Debt
In the event that debt is not what is referred to as “primarily consumer debt,” then you will not have to pass the Mean’s Test. As a result, you should take the time to add up all of your consumer debt, then compare it to the rest of your debt. One thing to remember: Tort claims are not consumer debts. If you have a tort judgment against you and it is more than your consumer debt, then you do not have to take the Mean’s Test.
What is Tort?
At this point, you may wonder: What is a Tort? It is essentially a civil wrong that causes injury/damage to another person without a lawful excuse. Note that a breach of contract is not a Tort. The biggest number of Torts is auto accidents. The law in all states requires that drivers take reasonable care to be safe on the roads. If a person is negligent or reckless, and their actions cause someone else injury or damage to their property, they have a committed a tort.
On the other hand, if a person enters into a contract, and the contract is specific about what the remedy will be if the contract is breached, then tort liability can be imposed by law. It is this imposition that courts are looking to and finding that tort damages are not considered consumer debts for the purpose of bankruptcy law.
It is True that the Means Test Determines Who Has Access to Bankruptcy
It is common for people to mean with a bankruptcy attorney and obsess over the means test. They assume that if they make more than the median income, they cannot qualify for bankruptcy relief. There are actually other ways to pass or get an exception from the Means Test.
The bottom line for anyone who is considering filing for bankruptcy is to remember that you are not in this alone. You have a qualified bankruptcy attorney ready to help you. Contact The Law Offices of Paul Y. Lee at 888-748-0025 now to request a free legal consultation and to understand what your options are.