Myth: I heard I make too much to file for bankruptcy. Anyone, no matter how much or little they earn,
can file bankruptcy . Read below about income and how it may affect bankruptcy filing.
NC Bankruptcy Lawyer in Charlotte North Carolina for Chapter 7 / Chapter 13
I have heard a number
of people say that they "made too much to file for bankruptcy" but what they heard and what the law says are two different matters.
In 2005, the bankruptcy laws changed to require
that people who make more than the median income of their state have to take a test, called the Means Test
. The income level sets who has to take the test, not who can file for bankruptcy
Many above median income debtors are still able to file for Chapter 7 bankruptcy depending on the outcome of the Means Test. Even if they don't pass the Means Test, there may be
circumstances that allow the filing of Chapter 7 anyway, and there may be a lot of help available in Chapter 13.
Contrary to a popular myth, filing Chapter 13 does not mean that you have to
repay your debts in full, only that you pay according to guidelines linked to your assets and your ability to pay.
The Means Test is used to determine if someone can file for Chapter 7 bankruptcy (a faster type of bankruptcy that
discharges most unsecured debts), or whether the law assumes they have enough money to pay some (or all) of their debts back
in a Chapter 13 repayment plan.
Even if someone passes the Means Test, it doesn't
mean they should file for Chapter 7. Chapter 7 can help many people who don't have a lot of assets and can't
pay their debts, but there are several reasons to file Chapter 13 that might benefit someone more than a 7. Each case
needs to be looked at to see whether or not there is a reason to file, or not to file, a particular bankruptcy type.
Either way, many people find huge debt relief in bankruptcy no matter
which way they go.
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