Fremont Bankruptcy: The Means Test
The Means Test is a method for determining whether someone qualifies for a financial-assistance program. A common means test is the one used to determine eligibility for Chapter 7 bankruptcy. Means testing is also used in distributing Medicare benefits and has been suggested as a solution for the Social Security problem.
For a notable bit of Means Test history, it was administered during the Great Depression as a screening method to qualify or disqualify candidates for programs such as "Home Relief" or Welfare, and in the 60's for Food Stamp applicants.
In 2005, the bankruptcy laws were overhauled adding the means test as a major element to exclude the wealthy from filing Chapter 7 Bankruptcy. These filers may opt for Chapter 13 bankruptcy instead, the difference being that they are required to pay back some of their debt rather than having the entire debt liquidated or released.
For a notable bit of Means Test history, it was administered during the Great Depression as a screening method to qualify or disqualify candidates for programs such as "Home Relief" or Welfare, and in the 60's for Food Stamp applicants.
In 2005, the bankruptcy laws were overhauled adding the means test as a major element to exclude the wealthy from filing Chapter 7 Bankruptcy. These filers may opt for Chapter 13 bankruptcy instead, the difference being that they are required to pay back some of their debt rather than having the entire debt liquidated or released.
