So, You Failed the Means Test ?

The biggest impediment to relief under the Bankruptcy Code is what is called The Means Test ( see article at http://www.johnesmithlawoffice.com/the_means_test_in_bankruptcy ). If you fail the Means Test you can be required to file a Chapter 13 paying a larger amount to your creditors than you can really afford. Is there anything that can be done? In some cases, "Yes".
First, it needs to be determined whether your case can be classified as a "business" case. If so, the Means Test results do not apply in a Chapter 7. A case with majority of business-related debt can be filed as a Chapter 7 regardless of the Means Test. The business debt must be 50.1% of all debt, including the mortgage. Some cases fail to be classified as business because the mortgage is such a high percentage of the debt, and it is considered "consumer".
Second, if a 13 is necessary because it is not a business case,the Means Test disposable income result can be significantly higher than the client can realistically pay. In those cases, some Courts allow a Motion to Waive the Means Test results due to "special circumstances"- loss of job, reduced hours, or bonus that skewered the Test.
If a waiver is not possible, the best method is to attempt to reduce the debt amounts to equal a 100% payout to all creditors at a rate that is affordable,. Typically this involves reviewing all claims filed by unsecured creditors(usually credit cards) to see if there is a basis to object to the proof of claim filed by the creditor attempting to prove the debt. If the correct documentation proving the debt is not provided, the debt can be disallowed and not included in the distribution under the /chapter 13 Plan. It is effectively discharged without payment. I have been fairly successful in attacking claims in this manner. In several cases, I have reduced the amount to be paid back by over 90%.
Failing the Means Test does not preclude a bankruptcy filing. It simply calls for more creativity and knowledge to work through the application of the Law.