| There is a lot of misconception out there about what | | | | low salary. This simply means that it is reasonable for |
| the new bankruptcy laws mean, and many people | | | | you to need bankruptcy. |
| who are in trouble with their finances think that they | | | | If your annual salary is higher, this doesn't mean that |
| can no longer declare bankruptcy. It's important to | | | | you can't successfully file Chapter 7 bankruptcy. |
| understand the new provisions, and one of the most | | | | However, you will have to take additional steps to |
| important changes in the bankruptcy code has to do | | | | prove your need for bankruptcy. This will include a |
| with something labeled the means test. | | | | detailed documentation of your income and expenses. |
| There seems to be an ongoing struggle between the | | | | For the relatively low percentage of applicants who |
| credit industry and consumers when it comes to | | | | fail the means test, the court will force them to |
| bankruptcy laws and other regulations. Recently, | | | | choose Chapter 13 bankruptcy. This of course means |
| Congress passed the bankruptcy Reform Act as a | | | | that the consumer has to pay back the debt (or at |
| result of pressure from the credit industry. This law | | | | least part of it) by making monthly payments |
| was supposedly aimed at preventing abuse from | | | | throughout the next three to five years. |
| consumers who declare bankruptcy even though | | | | Many have complained about this new law, but the |
| they can afford to pay off their debts. | | | | fact is we are stuck with it for now for better or |
| To that end, the means test was created to | | | | worse. Feel free to contact your Congressman and |
| determine whether a person should be allowed to | | | | complain if you wish, but for the time being simply |
| declare bankruptcy based on income and expenses. | | | | discuss your options carefully with your attorney to |
| If your income is lower than the median salary in | | | | see if bankruptcy is right for you. You'll also want to |
| your state, then you don't even have to worry | | | | learn as much as possible from these kinds of articles |
| about this test because you obviously have quite a | | | | and other resources. |