Updated Bankruptcy Information

Much prior bankruptcy information is now outdated. Because of recent Code modifications and expansions, new consumer laws now eliminate the possibility of filing Chapter 7 for anyone earning above the median income calculated for their state of residency when owing less than a new means test measures.

For example, if a single person earns $5,000 per month, less allowed expenses, the resulting disposable income (approximately $3,800 per month) is far above the maximum allowable disposable income ($166 per month) for filing Chapter 7. This person must file a 5 year, Chapter 13 plan if $60,000 a year is over the state median income level.

However, if $60,000 per year is less than the state median income level, this person could file Chapter 7 without qualifying under the new means testing requirements. Nationally, the average state median income is $53,350.

Bankruptcy Information

The inside story in Congress, when naming the "Abuse Prevention Act," revealed that hard data did not support legislative conclusions, nor do typical consumers need the federally approved instruction on managing their debts and budgets.

The impetus for filing, in over 80% of all cases, is personal financial devastation. When facing colossal medical bills, legal fees amassed defending divorce claims, or massive industry layoffs, mandatory counseling is wholly inadequate to prevent defaults. For true reform to be effective, the actual cause of financial devastation must be addressed: affordable health insurance, a fair wage, and job stability.