Why Congress Feature Test Bankruptcy

As the U.S. Bankruptcy Code changed in 2005, the bankruptcy filing has taken on a new complex that many problems understanding. One of the major changes that are difficult for most people to understand this is a test. Congress added a new means test for bankruptcy laws, when they changed the code. For this reason was to stop abuse of the bankruptcy filing. Who knows if it really worked. Before the law will come into force, it was a record number of people trying to get your bankruptcy filing by the deadline. 2006 figures had dropped substantially since, and it seemed to work. Then the overinflated real estate market melted almost completely collapsing economy. With this storm was created, and unemployment jumped more than 10% across the country. So a lot of support from the bankruptcy filing numbers are down from what source it has changed constantly went all the way up to half a million bankruptcy filings in 2010 one.

Return to the bankruptcy of this test, the test can be very confusing to the untrained eye, and was criticized by judges and lawyers across the States and a number of bankruptcy cases. I think it looked like a great idea, his concept.

One has to understand that this test only the financial equation, which tries to predict whether you can afford to pay some or all of your debts. If you fall into, in order to pay back their debt category you can be pushed into Chapter 13 bankruptcy rather than Chapter 7 bankruptcy have tried to file. In short, Congress created a means test to determine which type of bankruptcy filing is appropriate for the borrower.

When Congress created the means test, they are trying to make a uniform method for borrowers who have the resources to repay part or all of your debts Chapter 13 bankruptcy payment plan. Nuts and bolts of the test substance compared to the cost of research income. What's funny is what the bankruptcy has already had to fill in the form of income and expenditure, which was included in the bankruptcy law in 1986. Although Congress changed the code of tests In addition, they can still be damaged from previous experience. Actual income and expenditure test my current income and household expenditure and project them into the future. This form actually looks closer to the person in the household budget.

For this test uses a formula for the last six months of income, together with a mixture of cost, which may be reduced due to the IRS payments. With these and many other nuggets of fact included in the bankruptcy code is that it is inevitable that people would hire a bankruptcy attorney to help them make the transition from code complexity. If the borrower can help is to give your bankruptcy lawyer with all financial information, including evidence of past and current income and total household expenditure. The bankruptcy code was written by lawyers and it seems that it must be understood as well as lawyers.