Do I Qualify For Bankruptcy?

Means Test & Median Income Tests

While you may have many pressing bills which are creating a great strain on your life, you may not qualify for Chapter 7 or Chapter 13 bankruptcies. The means test is a way of determining if, in fact, you are eligible. In this test, your average income is calculated for 6 months, regardless of what your present income is. There are allowable expenses that you can then deduct which will determine your disposable income. These deductions include such things as mortgage or rent, secured debt and past due taxes.

If your income is above the median average, you may not qualify for bankruptcy. There may, however, be extenuating circumstances and a judge can review and make a determination if you can apply for bankruptcy regardless. If your income is equal to or below the average, bankruptcy may be right for you. An experienced attorney from Price Law Group can assist you in determining if you do qualify and can help throughout the entire bankruptcy process. An attorney from the firm is genuinely interested in seeing to it that your financial difficulties are resolved as soon as possible so that you and your family can have a fresh start and look forward to a better future.

Determining Median Income

The median income for a California household in 2009 was $58,000. Of course, this amount will differ from year to year and it will also differ depending on how many people are in your household, how many are contributing to income, etc. The state of California also has the highest median home price in the nation. In 2005, President George W. Bush made some major changes to bankruptcy law by way of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). What this amendment did was require this means test for all individuals who were attempting to file for bankruptcy. This protects from abuse of Chapter 7 bankruptcy while simultaneously preserving bankruptcy provisions only for those who are deserving of it. One criticism of the means test is that by requiring families to have a low income in order to qualify, it discourages saving and good spending practices, although this is not always the case.

Have an Attorney Evaluate your Finances!

Millions of Americans are faced with problems resulting from these tough economic times. The firm is here to help you with their 20 years of experience and vast knowledge in the areas of foreclosure prevention, short sale negotiations, tax resolution and preventing wage garnishment. They are also skilled in credit repair and putting a stop to creditor abuse by protecting you against violations of the Fair Debt Collection Practice Act (FDCPA).

You may have been considering bankruptcy for a while. Now is the time to take effective action toward resolving your financial problems. If bankruptcy is not right for you or you do not qualify, there are many other options available to you which a lawyer from the firm can consult with you about.