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$555 Flat fee bankruptcy from Fairmax Law™

By: Michael Jaafar

The History Of The Means Test

There’s been a lot made about the means testing requirement when filing for bankruptcy. When the federal government changed the bankruptcy laws in 2005, many people rushed to file Bankruptcy before the law was an acted out of fear that the means testing requirement would make it more difficult to file. But it has been 12 years since that time, and bankruptcy attorneys have not noticed a change in the way they handle bankruptcy cases. There is more paperwork to prepare, and more boxes to check, but the main thrust is still the same—people who cannot afford to pay their creditors can still find relief through the Bankruptcy process.

But the way Bankruptcy attorneys prepare Chapter 7 and chapter 13 bankruptcy petitions is different from a technical standpoint. Here is an analysis of the difference from chapter 7’s now as opposed to pre-2005. An analysis about the differences between Chapter 13 Bankruptcy now and before 2005 follows below.

How Chapter 7 Bankruptcy Was Affected

When you’re attempting to file a Chapter 7 bankruptcy, the means test basically acts as a gatekeeper; meaning, it tells you whether you qualify for a Chapter 7 bankruptcy or not. The only problem is that the means test is not conclusive. People who pass the means test don’t always necessarily qualify for Chapter 7, and people who failed the means test are sometimes able to successfully qualify for Chapter 7 anyway.

For example, if you pass the means test because your income was very low in the past six months, but the week before you file chapter 7 bankruptcy you get a new job that pays you well over the median level of income, then you will not qualify for Chapter 7 despite the means test telling you otherwise. Because there are other tests you must pass to truly be eligible for chapter 7.

And in the opposite situation, if the means test holds that you that you do not qualify for Chapter 7 because your income was well over the median level in the past six months, but you lost your job the week before you filed bankruptcy, then you will almost definitely qualify to file Chapter 7 bankruptcy despite the means test telling you otherwise.

How Chapter 13 Bankruptcy Was Affected

And when it comes to chapter 13, it becomes even more nuanced. The means test usually tells you what your minimum payment needs to be. But because the means test is a backward looking document, it is necessarily flawed.

For example, if you have received a pay raise in the days before filing bankruptcy, and you can actually afford to pay more money to your creditors than what the means test yields. Whereas if you have received a pay decrease in the days before filing chapter 13 bankruptcy, then the means test requires you to pay a larger amount and you can actually afford.

Now a competent attorney and find a legal way around this dilemma. But the main problem is that different bankruptcy judges interpret this situation differently. And in most bankruptcy courts, there are more than one judge. So, attorneys usually are not able to confidently tell their clients in advance of filing the case what their chapter 13 plan payment will be since those attorneys cannot guarantee that a certain judge will be drawn on that particular Chapter 13 Bankruptcy filing. It is a random process.

Conclusion

What all this means is that it is important to hire a local, competent attorney that is familiar with bankruptcy law before you file bankruptcy. It is definitely worth the investment. To receive a free, same day, over the phone consultation with one of our attorneys, call us at 888-FAIRMAX.

Fairmax Law operates in various states around the country including Michigan, Ohio, Illinois, Wisconsin, and Indiana.

Fairmax Law™  has offices in multiple states and is still in the process of expanding. For a free consultation with a licensed attorney, call the firm at 888-FAIRMAX or visit their website at fairmaxlaw.com

This article is not meant as legal advice, and Bankruptcy is very complicated depending on every persons overall financial situation. So, if you are considering any chapter of the bankruptcy code, is it called one of our attorneys for a free, same day consultation. To learn more about Chapter 7 or Chapter 13 Bankruptcy, the federal government has excellent information about it on their website at http://www.uscourts.gov/services-forms/bankruptcy Fairmax Law™ is a Service of Jaafar Law Group PLLC and is a designated debt relief agency that helps clients file bankruptcy under the federal bankruptcy code.

This article is not meant as legal advice, and chapter 13 is very complicated depending on every person’s overall financial situation. So, if you are considering any chapter of the bankruptcy code, is it called one of our attorneys for a free, same day consultation.

To learn more about Chapter 13 Bankruptcy, the federal government has excellent information about it on their website at http://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-13-bankruptcy-basics

Fairmax Law™ is a Service of Jaafar Law Group PLLC and is a designated debt relief agency that helps clients file bankruptcy under the federal bankruptcy code. These disclosures are required pursuant to federal law, and they are here for your protection. http://fairmaxlaw.com/required-disclosures-and-information-about-bankruptcy/

Also, please read the following disclosures before contacting our firm or making any hiring decision, as this is an advertisement.

All legal services are provided by in house employees or affiliated and related entities. Please contact us if you have specific questions on a state or entity.

Jaafar Law Group PLLC, a Michigan Professional Limited Liability Company d/b/a Fairmax Law registered in MI; Jaafar Law Group PLLC, a Michigan Professional Limited Liability Company d/b/a Jaafar Law Group PLLC in OH.

PAID ATTORNEY ADVERTISEMENT: Fairmax Law, a service of Jaafar Law Group PLLC is a Law firm. This website is an advertisement. It is not a lawyer referral service or prepaid legal services plan. Each of the lawyers on this site are either Managers, Members, Partners, Of Cousel, Limited Partners or staff attorneys. All photos are of models and do not depict clients. An attorney responsible for the content of this Site is Michael Jaafar, Esq., licensed in Michigan with offices at 23400 Michigan Ave, Suite 110A, Dearborn, MI 48124. To see the attorney in your area who is responsible for this advertisement, please click here. David Ienna is the Chief Executive of the firm in all states. Prior results do not guarantee a similar outcome.

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By an Act of Congress and the President of the United States, Fairmax Law, a service of Jaafar Law Group PLLC is a federally designated Debt Relief Agency. Attorneys and/or law firms promoted through this website are also federally designated Debt Relief Agencies. They help people file for relief under the U.S. Bankruptcy Code. Disclosures Required Under the U.S. Bankruptcy Code.

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Fairmax Law is a debt relief and credit repair law firm, with attorneys in multiple states. We are dedicated to bringing people the fresh start that most Americans need. Whether it is a bankruptcy, or a credit repair program, Fairmax Law is the right choice.
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