Because of the global crisis, many people’s finances were in chaos. Debts cannot be paid and without relief, the worsening condition can further bury the financially distressed citizens. To get off the turmoil, many indebted people resorted to bankruptcy wherein the main choices are between Chapter 7 and Chapter 13. |
When financial crisis hit the economy several years ago, many people’s finances were in chaos. Debts cannot be paid and without relief, the worsening condition can further bury the financially distressed citizens. To get off the turmoil, many indebted people resorted to bankruptcy wherein the main choices are between Chapter 7 and Chapter 13.
Between these two Chapters of the Bankruptcy Law, more relief-seeking people opt for the Chapter 13 option. Thus, the BAPCPA (Bankruptcy Abuse Prevention and Consumer Protection Act) was passed by Congress whereby a “means test” relevant to the debt relief is created. This act is geared towards the choice of the Chapter 13, a debt repayment scheme. The means test is baffling to both relief seekers and lawyers. People who wish to file under Chapter 7 had to pass the means test.
In trying to understand the means test, you will have to look at your average household income for the last six months, where the income of your spouse is also taken into consideration. This average income will be compared to the median income and this is based on family size. If your income is less than the value of the median, you definitely pass the means test otherwise you fail. This means that you have not abused your claim of Chapter 7 and therefore are eligible for this.
So what happens when your income is more than the applicable family income? The amount of available income to pay your creditor for a period of 5 years will be computed. If the available amount is more that what will be required of you over the 5-year period, you will have to file under Chapter 13 and not Chapter 7. This can be tricky to you and you may not understand the complexity of the needed computation. Your best way to check which of these two chapters will be applied to your case can be better explained by an experienced bankruptcy lawyer.
You should never navigate the meaning of means test on your own. There had been cases when people who tried to circumvent their financial condition end up having their case dismissed. It is only your lawyer who can assist you. And finding one is a crucial decision for you. Nobody can help you out in your financial crisis except a good and experienced lawyer.
How to find the best bankruptcy lawyer?
Your first source of information in finding your experienced attorney is to inquire from your friends and relatives. Well, this is usually the first line of action. If you no name is provided by these people, do not hesitate to search online. The web is a big source of information. Lawyers, doctors, engineers, architects and businesses all make use of the internet to inform the public of their availability. You will always find through the internet the legal counsel who can help you in your financial crisis.
The Law Office of Kathryn L. Johnson, PLC is your source for Tucson Bankruptcy Lawyers. To learn more about your bankruptcy options, you can check http://www.kathyjohnsonlawoffces.com.
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