A tool designed for California residents considering a specific type of bankruptcy. It helps determine eligibility by comparing an individual’s income against state medians. If income exceeds a certain threshold, further analysis is required to ascertain whether disposable income is sufficient to repay debts, potentially affecting the ability to file under that particular bankruptcy chapter.
This calculation is crucial because it acts as a gatekeeper, ensuring that bankruptcy relief is targeted toward those most in need. Historically, it was introduced to address concerns about abuse of the bankruptcy system, aiming to limit filings by individuals with sufficient resources to repay their debts. Successfully navigating this process can pave the way for debt relief and a fresh financial start.
