The “Means Test” and the Median Income for Nevada

If you’re thinking about filing for Chapter 7 bankruptcy in Las Vegas, then it’s important to understand the means test.

The means test was part of the 2005 bankruptcy law (aka BAPCPA) which was brought to you by the generous, warm-hearted folks in the credit and mortgage industry.  It says that before filing bankruptcy in Las Vegas (or anywhere else), you must demonstrate that your income is not higher than the median income for your state.  If it is, then there is a presumption that you are abusing the bankruptcy system.

If you fail the means test, then your only option is to file for Chapter 13 bankruptcy, which means a repayment plan that generally takes 3 to 5 years to complete.

What is the state median income for Nevada?

  • Single person = $48,194
  • 2-person family = $60,557
  • 3-person family = $65,783
  • 4-person family = $74,735

The problem these days, especially for Las Vegas residents, is that so many people are dealing with unemployment and foreclosure.  However, the means test is based on your income for the previous 6 months.  So if you’ve recently lost your job and are facing a mountain of debt, your bankruptcy options may in fact be limited until a few months have passed.  Of course, you may not feel like you can wait that long.

The solution, as with most bankruptcy problems, is preparation.  There are strategic ways of approaching the bankruptcy process to help you work within the bankruptcy system and get the full benefit of the laws.

If you’re unemployed and looking for good bankruptcy attorneys in Las Vegas who can provide the best Las Vegas bankruptcy help, contact us for a free initial bankruptcy consultation.

We’ve been helping Las Vegas residents deal with bankruptcy, foreclosure and loan modifications and get through this recession.  And we’re here to help you as well.

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