Since 2007, we have seen the US economy go through major changes due to political and banking policies. While the mainstream media is still trying to say that the economic numbers are showing a recovery, they obviously aren’t out on the streets talking to real people. The average American income is now close to $30,000. The sad thing is, the poverty level in the US is someone making $24,000 a year. So when the majority of people are making less there is no way the economy can be improving as people have less money to spend. Adding to that, we are seeing inflation and all the commodities from gas to food and housing. Recently, it was reported that 51 million American households are receiving food stamps. With the total number of people on food assistance reaching over 100 million and when you consider there are only a little over 300 million living in the US it just doesn’t add up. I don’t see how anyone can honestly believe that we are seeing in economy recovery at all.
Ever since the bankruptcy code changed back in 2005 it has become apparent that it is much more complicated to file Chapter 7 bankruptcy then it was in the past. Now, someone can’t make $200,000 a year and file Chapter 7 bankruptcy. Added to the bankruptcy code in 2005 was a means test that made a person qualify to file Chapter 7 bankruptcy. This was intended to make people who can possibly pay back at least a portion of their debt file Chapter 13 bankruptcy instead. What the means test does is it takes the last six months income prior to filing bankruptcy and divides it by six, only to multiply by 12 to get the average household income for that individual. This number will be compared against the median household income chart that is sent out by the Bureau of Census. The chart takes into consideration the number of people that reside in the household and the cost of living in that area. If the person makes less than the median income they might qualify to file Chapter 7 bankruptcy.
Just because a person passes the median income doesn’t mean they qualify to file Chapter 7. A person must also fill out an income and expense report that needs to show that a person has no disposable income left over after moving all their household expenses. This is where a bankruptcy attorney can figure out how to manipulate the numbers to qualify a person that maybe makes more than the median income chart. Basically, the bankruptcy court wants to make sure that the person has no more than $170 a month disposable income after paying all of their household expenses. The expenses do not include the debts that will be discharged in the bankruptcy filing.
To answer the question, filing bankruptcy is not only for the low income even in today’s economy. A good bankruptcy attorney will know when to pull the trigger and get the most benefits from the legal process. As the economy continues to wallow in the mud, Americans need to be more realistic with what’s going on, even if that means a bankruptcy filing. When I was a kid my parents used to always say, “don’t believe everything you’re told.” This statement applies to everything in or on the news today. People need to remember what Thomas Jefferson said, “Question with boldness even the existence of a God; because, if there be one, he must more approve of the homage of reason, than that of blind-folded fear.” Today the skill of being a critical thinker is gone and everyone takes everything at face value.