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An eclectic array of new formulas found their way into the new
Bankruptcy Code. Income, net of scheduled monthly expenses, produces a
new legal definition of disposable income for purposes of Means
Testing. In this regard, an individual's personal disposable income
must be compared to a measure of state median income within their
jurisdiction of residence. Any person who earns more than the median
income allowance standard may no longer file for Chapter 7
liquidation. The concept that debtors should rightfully repay debts to the extent
reasonably possible is not revolutionary. This basic idea of fairness has
driven the development of the Code since it's inception. The new
chapter 7 bankruptcy means testing scheme ignited gaseous debate while pending.
Current statutes regulating Chapter 7 bankruptcy:
Regulations targeting Chapter 7 are included mainly in Title 11 of the United States Code.
Also, additional applicable statutes randomly appear in other titles
and chapters, as well as an extensive collection of federal rules
covering several topics.
State Chapter 7 laws determine property exemptions in all states,
with a relatively few jurisdictions allowing an election of remedies between either state
or federal exemption lists.
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