ExpertHard1 markMultiple Choice
CPA · Question 69 · Area II: Business Law
Under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), a Chapter 7 filing may be dismissed or converted to Chapter 13 if the debtor fails which test?
Under the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), a Chapter 7 filing may be dismissed or converted to Chapter 13 if the debtor fails which test?
Answer options:
A.
The Insolvency Test.
B.
The Means Test.
C.
The Best Interests of Creditors Test.
D.
The Feasibility Test.
How to approach this question
Identify the test for 'Abuse' in Chapter 7. It's the Means Test.
Full Answer
B.The Means Test.✓ Correct
B
The Means Test determines whether a debtor has sufficient income to repay debts. If the debtor's income exceeds the state median and they have sufficient disposable income, the Chapter 7 filing is presumed abusive and may be dismissed or converted to Chapter 13.
Common mistakes
Thinking you must be insolvent to file bankruptcy (you don't).
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