Bankruptcy was intended as a way for people facing crushing debt to start over with a clean slate. Prior to bankruptcy reform, which created a means test, virtually anyone could file a Chapter 7 bankruptcy in Kansas and obtain a “fresh start” by having most of their unsecured debt extinguished. The credit and banking industry has an influential political lobby and was able to obtain bankruptcy reforms that added a means test as an eligibility requirement for a Chapter 7 as part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Many debtors believe that this bankruptcy reform means that anyone who is not unemployed or without significant assets will no longer qualify for a Chapter 7 bankruptcy. However, many people who are both employed and have significant assets may still be eligible for Chapter 7 bankruptcy relief. Even if someone does not qualify for a Chapter 7 bankruptcy discharge, there are other options such as a Chapter 13 bankruptcy that allows you to repay your debts (or some portion) over a period of years. An experienced Bankruptcy attorney can provide you with guidance regarding your available options and potential financial planning strategies.
The majority of middle class Americans still qualifies for a Chapter 7 bankruptcy discharge that will wipe out most unsecured debt. The Chapter 7 means test involves two levels of inquiry. The first inquiry in determining eligibility under the means test is whether one’s income exceeds the state’s median income level based on the size of a family. If a person makes more than the median income based on family size, eligibility is determined by deducting certain specified monthly expenses from your monthly income, which is based on your average income over the six month period preceding your Chapter 7 bankruptcy filing. Any income above your monthly expenses is considered your “disposable income.” The higher your disposable income, the more likely the determination you must file a Chapter 13 bankruptcy because you have sufficient income to repay some of your unsecured debt.
An experienced Kansas bankruptcy attorney can help you qualify for a Chapter 7 bankruptcy by helping you identify expenses you may not have considered and help you maximize the amount of those expenses. Counties and metropolitan regions have different allowed amounts for categories of expenses including basic necessities, housing, and transportation. A knowledgeable bankruptcy attorney in Kansas can maximize the expenses you claim so that you have the best chance of qualifying for Chapter 7 relief. Even if you do not qualify, an experienced bankruptcy attorney can still help you by filing a Chapter 13 or using other appropriate strategies.
We are pleased to handle bankruptcy cases in both Kansas and Missouri, Johnson County and the surrounding counties in the Kansas City metropolitan area. Weekend and evening appointments are available. To reach our Olathe law office, call 913-782-7075, or contact us online.
Weston R. Moore, Attorney at Law
13401 South Mur-Len Road
Olathe, KS 66062
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