I Heard It's More Difficult to File Bankruptcy Now, Is this True?
The bankruptcy reform act of 2005 did make some changes. The media in general misrepresented the extent of the changes and in my opinion created this myth that credit cards could not be discharged. It is not any "harder" to file bankruptcy then prior to the changes. One major change is that you have to qualify for a chapter 7 bankruptcy via the "means test". The means test simply puts a threshold amount that you can make per your family size to qualify. For example, you have a family of 3 (you, your spouse and child) and your income (both you and your spouse) of $50,000. Under the means test in this area indicates that you can make up to $71,706 (as of January 27, 2015) and still qualify for chapter 7. You always have to include your spouse's income even if only one of you are filing. It is based on household income. If you are separated, then it would only include your income. You are allowed to file chapter 7 bankruptcy once every 8 years. The applicable period is from the filing date of the old petition to the file date of the new petition. As long as it's more then 8 years, your good.
Most of my clients qualify for chapter 7 bankruptcy even under the new rules. You are allowed to discharge most all debts except student loans, most income taxes, child support, alimony and criminal fines.
Should you have any questions about whether you qualify for a chapter 7 bankruptcy, please call or email me for more information.
/s/ Mark Lewis, Esq.