When it comes to qualifying for bankruptcy, having a bankruptcy attorney by your side is crucial.

With so many Americans in financial distress, it’s no wonder that many are considering bankruptcy as a solution. The next thing to consider is whether to employ a bankruptcy attorney or file on my own. The response is that having an accomplished bankruptcy attorney in your corner looking out for your best interests is unquestionably a wise move. When it comes to attempting to collect on a loan, creditors have a lot of resources at their disposal. Why not level the playing field by hiring a professional to assist you in filing for bankruptcy?  Get the facts about bankruptcies

If a person wishes to file for bankruptcy, they should first meet with a bankruptcy attorney to see if they are eligible. New rules, specifications, and limitations were added to the bankruptcy code after it was revised in 2005. This involves implementing a means test to determine whether a debtor is eligible to apply for Chapter 7 bankruptcy. An experienced bankruptcy attorney will equate the debtor’s average monthly income to the state’s median income guidelines, as well as other factors like family size and monthly expenses. Calculating current monthly income, or CMI, is not as easy as it seems. Current monthly income is a highly fictitious statistic that can have a substantial effect on whether or not a person will file for Chapter 7 bankruptcy, or if they make too much money, they will be required to file for Chapter 13. If the debtor is forced into a Chapter 13 bankruptcy, this also determines how much money the debtor may have to reimburse the creditors in the repayment plan.

The debtor’s current monthly income, or CMI, is not the same as the debtor’s current monthly income, as in “this is what my monthly income is right now.” CMI refers to the debtor’s use of ALL money collected in the six months preceding the month in which the debtor files for bankruptcy. All “income” includes not only taxable earnings from one’s employer, but also Social Security, an inheritance, loans, monetary gifts from relatives, money found on the street, and virtually every other source of funds. If a debtor files for bankruptcy in July, for example, their CMI is calculated based on earnings from January to June of that year. If the debtor is a realtor, for example, this can be difficult if they only received one fee in the previous year, which happened during the six-month look-back span. This can inflate their CMI and income level to the point that they are ineligible to file Chapter 7 bankruptcy. To ensure qualification to file, an experienced attorney may simply change the filing date to wait until the income falls outside of the look back era. In a nutshell, CMI isn’t actually current, weekly, or revenue. It’s a figure that may or may not represent the debtor’s actual earnings. We’re not finished yet if that wasn’t complicated enough. To measure the debtor’s annual revenue, the bankruptcy attorney divides the CMI amount by six and then multiplies it by twelve. This figure is applied to the state’s average median income to see if the debtor qualifies for Chapter 7. Even if the debtor’s annual income is marginally higher than the state median, a bankruptcy attorney will be able to qualify the debtor based on the number of dependents and a thorough examination of the debtor’s income and expenses.

You should now have a better understanding of why hiring an accomplished bankruptcy attorney is a smart idea. As a result of the 2005 code reforms, filing for bankruptcy has become more complex. This is before even attempting to apply, let alone determining multiple exemptions to protect properties, properly filling out the lengthy petition, and so on. A bankruptcy attorney is a vital part of your team who will help you achieve financial independence.