What Is the Purpose of the Means Test Under Chapter

question 20

Essay

What is the purpose of the means test under Chapter 7? Describe briefly the dividing line that determines whether a debtor files under Chapter 7 or Chapter 13.

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Definitions:

Operating Cash Flow

Cash generated by a company’s core business operations.

Cash Flow

Cash Flow is the net amount of cash and cash-equivalents being transferred into and out of a business, affecting its liquidity.

Assets

Resources owned by a company, expected to deliver future economic benefits.

Capital Gains

Profit realized from the sale of assets like stocks, bonds, or real estate when the selling price exceeds the purchasing price.