The heart of the sweeping new bankruptcy law set to take effect in October is a so-called "means test" that many filers will be forced to undergo to prove they are worthy of erasing their debts.

		Second of a series This is the second of a three-part series on the new bankruptcy law. The final installment will appear tomorrow. Part One: Bankruptcy is about to get a lot harder -- and, law's detractors say, meaner Part Three: Ripe for abuse? Critics of federal bankruptcy law worry about counseling requirement

Unlike final exams, it is a test filers will be hoping to flunk.

Those who pass will be deemed to have the "means" to pay off more of their debts. In that case, they won't be eligible for the most popular type of bankruptcy filing, a Chapter 7, which essentially lets debtors walk away from their bills after forfeiting most assets.

Instead, debtors will be restricted to filing under Chapter 13, a more costly and lengthy process that allows them to keep more assets in exchange for sticking to a court-ordered spending and repayment plan.

Supporters of the legislation insist that the means test will weed out abusers and force people who can truly afford it to pay back at least some of their debts. They say the test will do a better job of diverting filers to Chapter 13 repayment plans than judges, who currently decide which type of filing is most suitable.

But critics charge it won't work that way.

They say the test will do more harm than good by shutting out legitimate filers. They also contend the structure of the test will make it easy to abuse.

Debtors will trigger the means test if they make more than their state's median household income, adjusted for family size and inflation. The median household income in Pennsylvania was $41,478 in 2003, according to the Census Bureau.

If income exceeds the median, the court then must use a combination of state and IRS standards to determine what are reasonable costs for housing, food and other living expenses. Debtors who have enough money left over to pay creditors at least $6,000 over 5 years -- $100 per month -- will be forced into Chapter 13.

Currently, judges set reasonable living expenses and determine how much debtors can afford to repay creditors.

Veteran bankruptcy attorney Ken Steinberg of Steidl & Steinberg, Downtown, doesn't believe that using standardized living expenses is fair.

For example, he said, he remembers one set of clients who had moved from Allegheny County to Beaver County to accept jobs after losing their old ones. A short time later, both were transferred back to Allegheny County to work.

As a result, their commuting expenses were enormous -- a consideration that the new law may not allow. "Is the new law going to consider that these people are spending too much on gasoline?" If so, people in similar situations may have to give up their jobs or sell their homes, Steinberg said.

In addition, the formula for calculating income, which averages a filer's monthly income over the previous six months, is similarly unfair, said Travis Plunkett, legislative director at the Consumer Federation of America.

"What if you lost your job two months ago? They will count income going back four months that you no longer have," he said. "That doesn't make sense."

Some also contend the test will make it easy for deadbeats to continue to work the system.

"People could stay out of work for another month or so to reduce their monthly income or [run up] debts" just to duck the means test, said Jeff Morris, resident scholar at the American Bankruptcy Institute, a nonpartisan group that tracks bankruptcy statistics.

Morris also maintains that the test will do little to actually get more money into creditors' hands, noting that two-thirds of Chapter 13 filers already fail to complete their repayment plans.

"It's unrealistic to think you will have a better success rate for people who are involuntarily forced into Chapter 13."