Tuesday, August 19, 2008

The "New" Bankruptcy Laws

In 2005, Congress changed the U.S. Bankruptcy laws. The press and experts declared that bankruptcy was "harder" now. In truth, the law is not harder for most Americans. Rather, the biggest change was the implementation of the "means test".

The means test takes into consideration the consumer's income, less any allowed expenses. If one's income is under the median income for those in the area, the "means test" is not applied. If the income is over the median income, the calculations must be done to determine if the consumer is eligible for a Chapter 7 versus making some payment in Chapter 13.

Even if one makes more than the median income in his or her area, Chapter 7 could be filed. It is best to consult an attorney to assist in making a decision as to which chapter is best.

Get more information about bankruptcy at the soon to be posted "Bankruptcy Facts" and "Which chapter is best for me".

1 comment:

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