To File Bankruptcy Do I Have To Take a Test?

Most people filing bankruptcy get confused when they hear that they have to take a test to qualify to file bankruptcy. The test that everyone worries about is called the means test and was added to bankruptcy filing after the changes to the bankruptcy code in 2005. When Congress amended the bankruptcy code they believed that too many people were abusing the system by filing Chapter 7 bankruptcy. They felt that part of this group of people were capable of paying back at least a portion of their debts by filing Chapter 13 bankruptcy. They believed that people wouldn’t do this voluntarily so they implemented a qualification system through the means test. Ever since the code went into effect many people have been arguing the fairness of the new system. Many people that sit on the fence and get placed in a Chapter 13 end up failing because they cannot afford the payment plan. Usually, this group failed to listen to the bankruptcy attorney or tried to go it alone.

What people need to understand is how to use the test to their benefit with timing. Even when filing bankruptcy, timing is everything. This is one reason that many say that it is necessary to hire a bankruptcy attorney when filing for bankruptcy because of these changes. The bankruptcy attorney will know exactly when to pull the trigger and how to manipulate the income to qualify the person to file Chapter 7 when they are close to the edge. Most of the time, an attorney can tell their client things they will need to do to qualify to file. It might be just not working overtime for a few months to lower their income enough to be under the median income for their state. Sometimes it might be as simple as not listing all of one’s expenses. The bottom line is, to qualify to file bankruptcy one cannot have more than $150 of disposable income per month not including the debts that will be wiped out in the bankruptcy discharge.

A bankruptcy attorney will also know how to get the maximum benefit from the bankruptcy exemption laws that protect an individual’s property. This is one area of the law where a bankruptcy attorney really earns their keep. When someone is filing pro se, they will be required to select the bankruptcy exemptions that they feel are best to protect their property. Many times they find out during the 341 meeting that their property is no longer protected and up for grabs. A local bankruptcy attorney will have filed many cases with the district court in which they reside. They will know exactly what the bankruptcy trustee will want to see for a successful bankruptcy discharge. For those that are worried about the cost, all they have to do is consider the amount of debt that’s been wiped out in the discharge and the cost of a bankruptcy attorney will seem minimal.