Troubled By Debt Pressures

Debt pressures can become such a burden that they interfere with a person’s ability to cope with other daily needs. When this happens a consumer often thinks seriously about pursuing bankruptcy. This type of debt relief does have specific requirements that must be met. Not every person who is deep in debt may automatically meet these requirements to declare bankruptcy. It is important for a consumer who is interest in bankruptcy to understand that the Bankruptcy Abuse Prevention and Consumer Protection Act, also known as BAPCPA and passed in 2005, established a means test to help debtors determine if they are eligible to file a bankruptcy. The purpose of this test is also to determine who may be able to repay some of their debt and who will need many of their debts to be discharged. The bankruptcy means test is not just a matter of plugging in numbers. This test requires careful calculations and thorough analysis of a debtor’s financial circumstances. The means test may be said to contain more than one component. It is wise for a debtor who is contemplating bankruptcy to gather all related financial information including recent tax returns, a copy of a monthly budget, complete list of all debts, written breakdown of assets and earning records and make an appointment to go to a Minnesota law firm to meet with a bankruptcy attorney.  At a meeting with  a licensed lawyer there can be an evaluation of these material to determine a consumer’s eligibility for bankruptcy. That consideration by the lawyer may include taking your monthly income from all sources, and then determining whether any of your income might be excluded from the income calculations. Once your current monthly income (CMI) is determined, it can be compared to the median income for your area. If you meet this threshold, you may be on your way to potentially passing the Chapter 7 means test and be eligible to declare bankruptcy. There is however, still more evaluation that needs to be completed to determine if there are any other issues that might impact a consumer’s ability to qualify for bankruptcy and specifically which type of bankruptcy, Chapter 7 or Chapter 13, best fits that person’s needs given the applicable facts. given the complexity of the factors to be considered and there importance to a consumer it is wise for him or her to meet with an experienced bankruptcy attorney that is licensed in the applicable state to get help in the consideration of whether bankruptcy is an available option for relief given the facts.

This article is not intended to give legal advice and does not do so. The reading of this article does not establish an attorney-client relationship or substitute for consulting with a licensed lawyer.

We are a debt relief agency. We help people file for relief under the Bankruptcy Cod

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