In the current economic environment, many people have fallen into debt. As the debts continue to multiply, the ability to pay them becomes virtually impossible. As the reasons and causes of the debt vary from each individual, so do the solutions. It is important to understand that Bankruptcy is NOT a one size fits all solution.

Contrary to popular belief, not everyone is eligible to declare bankruptcy. In October of 2008, the means test established by the 2005 Federal Bankruptcy Reform act was adjusted. This means test compares your income with the median average monthly income in your state to determine whether you are eligible to have your debts discharged in bankruptcy or whether you must participate in a repayment plan and/or file Chapter 13 bankruptcy instead of Chapter 7 bankruptcy. Median income figures were adjusted by the Department of Justice on October 1, 2008, altering the numbers at which you would be considered eligible for discharge of debt. If you have questions about these laws or the impact on your case, consult with an experienced bankruptcy attorney in your state who can provide you with relevant local information and rules.

While bankruptcy should be considered as an option, it should not be recommended immediately as the ONLY option. Without a detailed, personal financial analysis and application of the Federal Bankruptcy Means Test, it is impossible to truly know if the individual even qualifies to file bankruptcy. If a service provider instantly pushes for bankruptcy as the only solution- this should be a red flag to individuals that they may need to get a second opinion.

About the Author: Joseph M. Bochicchio, PLLC. is a licensed Charlotte, NC Bankruptcy Lawyer with nearly 2 decades of experience in finance and law. His Charlotte Debt Settlement Law Firm is committed to providing legal and ethical guidance for North Carolinians facing financial hardship.

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