Ten Years Later: Dayton, Ohio Bankruptcy Attorney Discusses the Bankruptcy Reform Act

In 2005, President George W. Bush passed anti-fraud bankruptcy legislation that made it more difficult for some people to file bankruptcy. Although people who have filed for bankruptcy in the past 10 years must meet several additional criteria, the majority still qualify. If you are currently overwhelmed by debt and are wondering if bankruptcy is an option, check the requirements below and then get in touch with our Dayton, Ohio bankruptcy attorney.

Income Requirements

Prior to the bankruptcy legislation of 2005, people had the option of choosing Chapter 7 or Chapter 13 based on what they felt was best for their circumstances. Since that time, filers are required to have a household income that is at or below the state median. This requirement also takes the number of people in your household into account.  For a family of four in Ohio, the current limit is $76,381.

Means Test

If your income is higher than state guidelines, you are required to take a means test. To do so, you must collect information about all sources of income, your current debts, and your current living expenses. You are allowed to subtract certain expenses based on state averages. The amount left over is how much you have to enter into a long-term payment plan with your creditors. This is how Chapter 13 bankruptcy works.

Counseling Requirements

The 2005 legislation made it mandatory for all people filing bankruptcy to complete financial counseling. The first session is to determine if bankruptcy or a payment plan is your best option. The financial counselor must represent an agency approved by the United States Treasury Office. You must submit proof of completion to the bankruptcy court before you can proceed.

Shortly before your bankruptcy is scheduled for discharge, you must complete a second financial counseling session on money management. Again, proof of completion is required before you are eligible for discharge of your debts.

Confused? We Can Help

If you’re still not sure whether you qualify to file bankruptcy, contact us at Chris Wesner Law Office, LLC for a consultation. We’ll walk you through the income test and let you know immediately.

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