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How To “Qualify” For Bankruptcy

Money matters and how well the economy is doing always seem to be a hot topic for politicians and congressmen. The number of bankruptcy filings and the amount of debt being eliminated continues to grow on a daily basis, and this leaves lenders looking for other options or ways to prevent one of their debtors from filing for bankruptcy. But distressed borrowers have the right to seek the protection of bankruptcy, and this right is directly at odds with what lenders prefer. This all came to a head in 2005 when Congress decided the nation’s bankruptcy laws needed a major overhaul. The result was a new Act, with significant changes. The most significant of these changes was with implementation of the means test. This test is a mathematical computation that is performed at the outset of every case, and the result dictates whether a consumer is allowed to file a chapter 7 or will be forced into the more intensive chapter 13 type of case.

The means test calculation is complex and includes an examination of some of the following data:

  • The amount of secured debt you have accumulated.
  • The amount of income you bring in, compared to your secured debt load.
  • Whether you have any disposable income left over after payment of secured debts, to dedicate to payment of unsecured obligations such as credit cards.

If the test shows you have some money left over each month and can pay even a small amount to your unsecured debt, you may have to file a chapter 13. On the other hand, if you are not able to service all of your secured debt and have nothing left over for paying unsecured debts, you will qualify for a chapter 7 case. The calculation requires a fact intensive review of your finances, and should only be performed by a trained bankruptcy professional. If you miscalculate the answer, the U.S. Trustee could ask that your case be considered an abuse of the system and that it be dismissed. This is not something you want to have happen, so let us help you today.

For help with bankruptcy, contact us at We will help by looking at your case and letting you know your options. Our goal is to develop a strategy geared towards coming up with solutions that work for you.



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