A qualified New York City bankruptcy attorney may be able to help you get out of debt and on with your life.
When your debts are way beyond your means to pay them off, you should find real help from a qualified New York City bankruptcy attorney. A sponsoring New York City bankruptcy attorney of Total Bankruptcy should work hard to help provide you with all the resources you need to become educated about your legal options and to take back control of your financial life. Upon hiring a New York City bankruptcy attorney you will be starting the process of rebuilding your credit. Between illness, job loss and divorce more people are in need of a qualified New York bankruptcy attorney than ever before.
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Both the Senate and House have passed the Bankruptcy Abuse Prevention & Consumer Protection Act of 2005 resulting in a significant change in how your bankruptcy attorney should be able to handle your filing. The centerpiece of the Act is the "Means Test", making it much harder for debtors to prove they can't pay their debts. If your income is above a specified level, then you are not permitted to file your bankruptcy case under Chapter 7 and must instead use Chapter 13. Chapter 13 requires that you enter into a repayment plan rather than simply liquidating your debts. Because the means test is extremely complicated, simply calculating it will add another layer of costs to the Chapter 7 case.
Under the means test criteria, many consumers may not be permitted to get a fresh start under Chapter 7. The court will first have to determine whether, after the deductions of certain essential living expenses from your income, you may be able to afford to pay 25 percent of your non-priority unsecured debts including your credit card bills. Next, your income will be compared to your state's median income. You won't be allowed to file for Chapter 7 if the court determines that your income is above your state's median income and you can afford to pay 25 percent of your unsecured debt. Even if your median income is below the state's median, but you may be able to pay 25 percent of your unsecured debt, the court might require you to file under Chapter 13 if it believes that you may abuse the system by filing for a Chapter 7.
The means test
In determining your income and what you may be able to afford to pay, the court does not look at your actual expenses, but instead will determine your expenses based on living standards established by the IRS. The expenses that the court will apply to your case may be much lower than your actual expenses, thus making you appear to be able to afford a Chapter 13 repayment plan, when in fact you cannot. Under this means test, if the court determines that your income is sufficient to pay off your debts, the court may then presume that your Chapter 7 case is abusive, and it will then have the option to convert your case to a Chapter 13, or even to dismiss it outright.
Call Total Bankruptcy for a free evaluation at 1-877-349-1309 or fill out our online evaluation form to make an appointment to speak with one of our legal representatives.
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The purpose of this web site is to help you learn everything you need to know about bankruptcy, the process, your bankruptcy attorney and your legal rights. The best place to start is with the U.S. Bankruptcy Code. It delivers protection to people in financial jeopardy who are suffering under mountains of debt. Bankruptcy is your legal right.