This past Sunday, something happened that will allow more Oklahomans to be able to file Chapter 7 bankruptcy.
It used to be that almost anyone with serious debt problems could seek to eliminate their debts by filing Chapter 7 bankruptcy. That all changed in 2005 when the new bankruptcy laws were passed by Congress. The new bankruptcy laws were intended to make it more difficult to file Chapter 7 bankruptcy where debts are discharged (forgiven or wiped out) and to force more people into Chapter 13 bankruptcy where a substantial part of debts must be repaid.
The new bankruptcy laws contain a “Means Test” that determines whether a person gets to file a Chapter 7 bankruptcy or has to file a Chapter 13 bankruptcy.
Well this past Sunday, March 15, 2009, the government updated the criteria used in the Means Test calculations. These updated figures mean that more Oklahomans will qualify to file Chapter 7 bankruptcy.
The Means Test
The Means Test is a complex formula designed to decide whether a person has the financial means to pay back a substantial portion of his or her debts.
Basically, if a person’s income is below the Oklahoma state median income for a family of the same size, he automatically passes the Means Test and may file a Chapter 7 bankruptcy. However, if a person’s income is above the Oklahoma state median income for a family of the same size, then he initially fails the Means Test. That person may still be able to qualify for Chapter 7 bankruptcy if he has a sufficient amount of deductions that are allowed by the Internal Revenue Service (IRS). If not, then that person will have to file a Chapter 13 bankruptcy instead of Chapter 7.
New Criteria Means More Oklahomans Qualify for Chapter 7 Bankruptcy
The new criteria, which is based on U.S. Census figures and I.R.S. tables, increases the median income for Oklahoma residents. It also increases the various Means Test deductions which will make it easier for Oklahomans to be eligible for Chapter 7 bankruptcy relief.
This new criteria will have the effect of enabling more Oklahoma consumers to qualify for Chapter 7 bankruptcy.
If you are struggling with debt problems and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.
