New Bankruptcy Laws

How do the New Bankruptcy Laws Affect You in Arizona?

On October 17, 2005, new bankruptcy laws were passed that had the effect of applying a means test to determine whether individuals were eligible to eliminate their debt by filing Chapter 7 bankruptcy. The giant credit card industry hailed it as a major success. One of the myths about the new bankruptcy laws, though, is that many people now believe they can only file Chapter 13 bankruptcy or a debt settlement plan to repay their debt. In truth, the new bankruptcy laws have had very little effect on individuals. The large majority of people still qualify to file Chapter 7 to completely eliminate their credit card debt.

Clark Law Offices is ready to help you with all of your bankruptcy and debt relief needs. Contact us today to discuss your debt relief needs with an attorney who cares about helping you get a fresh start.

Free initial consultation about your bankruptcy needs

We accept all major credit cards and payment plans are available

Conveniently located just south of the Biltmore, just minutes from Hwy 51

If you are considering filing for bankruptcy, it may be helpful to understand how the new means test applies to your financial situation. A basic means test is now used to determine can use to give you a general idea of how the new bankruptcy laws may affect you. Of course, the results of this example test are not meant to be the final word. Our lawyers will give you honest answers about whether bankruptcy is right for you.

In a nutshell, here is a brief summary of the new laws:

• Within six months before filing, you must take an approved financial management course.
• If your current monthly income is less than the median income in your state of residence, you may be eligible to file for Chapter 7 debt elimination of all of your unsecured consumer debt. You may not discharge tax debt, or student loans.
• If your current monthly income is more than the median income in your state of residence, you must apply a means test:

Here is a simplified version of the new Means Test

Step 1: Subtract your $ monthly expenses from your $ monthly income = N

Step 2: N x 60 = X

Step 3: If X of step 2 is >$10,000, or >25% of your consumer debt, then you are only eligible to file Chapter 13 debt reorganization

If X of step 2 is <$6,000, or <25% of your debt, then you are eligible to file Chapter 7 for consumer debt to eliminate your unsecured debt.

To learn more about our debt relief services, please visit these pages:

• Chapter 13 bankruptcy to reorganize debt
• Chapter 7 bankruptcy eliminate debt
• Debt settlement plans
• New bankruptcy laws
• Senior citizens and bankruptcy

We will help you understand the new bankruptcy laws, ways to stop harassing collection calls, and find possible alternatives to bankruptcy. Contact our offices in Phoenix and Tucson, Arizona, for a free consultation. We represent people in communities throughout Arizona.