Charlotte Bankruptcy - New Laws
Chapter 7 bankruptcy vs Chapter 13 Bankruptcy
Charlotte New Bankruptcy Laws
Now that the new bankruptcy law is in effect, the landscape has changed for those who are considering bankruptcy. Some filers with higher incomes won't be allowed to use Chapter 7, instead they will have to repay at least some of their debt under Chapter 13. All debtors will have to go through mandatory credit counseling before they can file a bankruptcy case, plus they will need additional counseling on budgeting and debt management before their debts can be wiped out. Below our bankruptcy lawyers have listed some of those changes. Restricted Eligibility for Chapter 7 Bankruptcy
Under the old rules, most filers could choose the type of bankruptcy that seemed best for them and most chose Chapter 7 bankruptcy (liquidation) over Chapter 13 bankruptcy (repayment). The new law will prohibit some filers with higher incomes from using Chapter 7 bankruptcy.
How High is Your Income?
Under the new rules, the first step in figuring out whether you can file for Chapter 7 bankruptcy is to measure your "current monthly income" against the median income for a household of your size in your state. If your income is less than or equal to the median, you can file for Chapter 7 bankruptcy. If it is more than the median, however, you must pass "the means test" another requirement of the new law in order to file for Chapter 7 bankruptcy.
The Means Test
The purpose of the means test is to figure out whether you have enough disposable income, after subtracting certain allowed expenses and required debt payments, to make payments on a Chapter 13 bankruptcy plan. To find out whether you pass the means test, you subtract certain allowed expenses and debt payments from your current monthly income. If the income that's left over and after these calculations is below a certain amount, you can file for Chapter 7 bankruptcy. We understand that this can be overwhelming but we are here to help you navigate through this process.
Mandatory Credit Counseling
As of October 17, 2005, before filing for bankruptcy applicants must now undergo credit counseling in a government-approved program.
Let Schwilm Law Firm help you getting debt free. For a first free consultation call our lawyers at 704-567-5252.
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