Website design By BotEap.comThe United States Code under 11U.SC and its various chapters relating to bankruptcy grants both individuals and businesses the right to seek debt relief provided certain factors are met that make them eligible to file. . Individual debtors commonly seek relief under chapter 7 or chapter 13 of the code.

Website design By BotEap.comIn 2005, the legislature amended bankruptcy laws to include a “means” test, which qualifies an individual seeking relief.

Website design By BotEap.comA simple question is asked: do you earn more than the average family in your state?

Website design By BotEap.comThe means test is based on family household income and family size.

Website design By BotEap.comIf you earn more than the average family, you do not have the option of filing a return under chapter 7 of the code because you have the means, according to the legislature, to pay off some of your unsecured debts. Your earnings are calculated at your current monthly income or an average of what was made during the 6 months prior to filing. This gives us your current monthly income which is used to determine eligibility. The new corporation law excludes social security disability from monthly income calculations when the debtor determines if it is below the applicable median income and is exempt from the means test.

Website design By BotEap.comIf you earn less than the median household income and qualify for chapter 7 but need to catch up on your car or mortgage payments, then chapter 13 is the only option, since you must be current on these secured debts to maintain them ( reaffirm) in a Chapter 7 bankruptcy.

Website design By BotEap.comTo see how much the median family in your state earns, go to http://www.justice.gov/ust/eo/bapcpa/20091101/bci_data/median_income_table.htm, which is where you’ll find the Census Bureau’s Median Family Income by family size.