The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was passed in 2005 by the Bush administration in an effort to reduce the number of people who file for Chapter 7 bankruptcy. This act established a number of new requirements for those wishing to file for Chapter 7, making it more difficult for people to qualify. Those that are found ineligible for Chapter 7, however, are still free to file for Chapter 13, or reorganization bankruptcy.
Arguably, the largest change made by BAPCPA was the implementation of the means test. The means test is a method of determining whether or not you have the financial means to pay off some of your debts. If your income is above the state’s median income, then you must take the means test. However, if your income falls below the state’s median income, you do not need to take the means test.
This examination analyzes your disposable monthly income in order to determine whether or not you can pay off your debts under a Chapter 13 reorganization bankruptcy filing. If you fail the test because you actually can make some progress on debt repayment under Chapter 13, then you cannot file for Chapter 7.
If you are unsure about how to take the means test, then you may want to enlist the help of an experienced and qualified bankruptcy lawyer. The Birmingham bankruptcy attorneys of [firm-name] have the knowledge and skills necessary to help you effectively review your situation.
If you are thinking about filing for Chapter 7 bankruptcy, then Birmingham bankruptcy lawyer Paula Greenway can help you assess your situation and begin the filing process. To schedule your free initial consultation, contact her today by calling [phone-number].