United States
| Bankruptcy in the United States |
|---|
| Bankruptcy in the United States |
|
| Chapters |
|
| Aspects of bankruptcy law |
|
Means testing "refers generally to the eligibility for relief for debtors who have sufficient financial means to pay a portion of their debts." The means test is perhaps best recognized in the United States as the test used by courts to determine eligibility for Title 11 of the United States Code Chapter 7 or Chapter 13 bankruptcy.
During the Great Depression, the test was used to screen applicants for such programs as Home Relief in the United States, and starting in the 1960s, for benefits such as those provided by Medicaid and the Food Stamp Program.
In 1992, third-party Presidential candidate Ross Perot proposed that future Social Security benefits be subjected to a means test; though this was hailed by some as a potential solution to an impending crisis in funding the program, few other political candidates since Perot have publicly made the same suggestion, which would require costly investigations and might associate accepting those benefits with social stigma.
In 2005, the United States substantially changed its bankruptcy laws, adding a means test to prevent wealthy debtors from filing for Chapter 7 Bankruptcy. The most noteworthy change brought by the 2005 BAPCPA amendments occurred within 11 U.S.C. ยง 707(b). The amendments effectively subject most debtors who make an income, as calculated by the Code, above the median income of the debtor's state to an income-based test. This test is referred to as the "means test." The means test provides for a finding of abuse if the debtor's income is higher than a specified portion of their debts. If a presumption of abuse is found under the means test, it may only be rebutted in the case of "special circumstances."
Debtors whose income is below the state's median income are not subject to the means test. Notably, the Code-calculated income may be higher or lower than the debtor's actual income at the time of filing for bankruptcy. This has led some commentators to refer to the bankruptcy code's "current monthly income" as "presumed income." If the debtor's debt is not primarily consumer debt, then the means test is inapplicable.
Thus, the means test is "a formula designed to keep filers with higher incomes from filing for Chapter 7 bankruptcy. (These filers may use Chapter 13 bankruptcy to repay a portion of their debts, but may not use Chapter 7 to wipe out their debts altogether.)" The bankruptcy means test is rather complex but quite generous and most debtors have no trouble meeting its requirements. Others have suggested that the means test is not all that fair or equitable, and have somewhat cynically pointed out that the reference to consumer protection in the bankruptcy act is ironic at best, since those with primarily consumer debt are required to pass a means test while businesses are not. What is undeniable is that it is complex, and the terms that govern many parts of it - including those terms that control whether it applies at all - are of unsettled definition.
Read more about this topic: Means Test
Famous quotes related to united states:
“To the United States the Third World often takes the form of a black woman who has been made pregnant in a moment of passion and who shows up one day in the reception room on the forty-ninth floor threatening to make a scene. The lawyers pay the woman off; sometimes uniformed guards accompany her to the elevators.”
—Lewis H. Lapham (b. 1935)
“Some time ago a publisher told me that there are four kinds of books that seldom, if ever, lose money in the United States—first, murder stories; secondly, novels in which the heroine is forcibly overcome by the hero; thirdly, volumes on spiritualism, occultism and other such claptrap, and fourthly, books on Lincoln.”
—H.L. (Henry Lewis)
“What chiefly distinguishes the daily press of the United States from the press of all other countries is not its lack of truthfulness or even its lack of dignity and honor, for these deficiencies are common to the newspapers everywhere, but its incurable fear of ideas, its constant effort to evade the discussion of fundamentals by translating all issues into a few elemental fears, its incessant reduction of all reflection to mere emotion. It is, in the true sense, never well-informed.”
—H.L. (Henry Lewis)
“The recognition of Russia on November 16, 1933, started forces which were to have considerable influence in the attempt to collectivize the United States.”
—Herbert Hoover (1874–1964)
“The white American man makes the white American woman maybe not superfluous but just a little kind of decoration. Not really important to turning around the wheels of the state. Well the black American woman has never been able to feel that way. No black American man at any time in our history in the United States has been able to feel that he didn’t need that black woman right against him, shoulder to shoulder—in that cotton field, on the auction block, in the ghetto, wherever.”
—Maya Angelou (b. 1928)