{"id":754,"date":"2017-08-23T16:15:51","date_gmt":"2017-08-23T21:15:51","guid":{"rendered":"http:\/\/www.mankatobankruptcy.com\/blog\/?p=754"},"modified":"2017-08-23T16:15:51","modified_gmt":"2017-08-23T21:15:51","slug":"bankruptcy-owatonna","status":"publish","type":"post","link":"https:\/\/www.mankatobankruptcy.com\/blog\/bankruptcy-owatonna\/","title":{"rendered":"Bankruptcy in Owatonna, MN, Since 2005"},"content":{"rendered":"

As with all departments of US legislation, bankruptcy is an ever-changing legal process. Because the status of finances and the economy are rapidly transforming with the development of new technology, new energy, and new ways to spend, save, and make money, the laws that govern how debt is handled must change accordingly. Since 2005 the laws, standards, and procedures of bankruptcy have changed significantly. If you\u2019re considering filing for bankruptcy in Owatonna, MN, it\u2019s important to understand how bankruptcy law works today. Behm Law Group, Ltd. provides the legal advice and assistance necessary to successfully navigate bankruptcy.<\/p>\n

The most recent changes made to bankruptcy law came in 2005 when Congress amended the bankruptcy code for purposes of determining how consumer households file for Chapter 7 bankruptcy<\/a> and how Chapter 13<\/a> repayment plans are structured. These changes included the following.<\/p>\n

Means Test and Income Measurement<\/strong><\/p>\n

\u00a0<\/strong>Before the 2005 overhaul, individual filers could choose the type of bankruptcy that worked best with their situation (in their or their lawyer\u2019s opinion). This allowed filers with high incomes to benefit from Chapter 7 bankruptcy in a way that was perceived to be unfair to creditors.\u00a0 Namely, Congress believed that people with higher incomes could enter into a Chapter 13 repayment plan and pay at least something to their unsecured creditors. Today, all filers are required to take the Means Test<\/a> to analyze their income for the 6 month period prior to the month in which their bankruptcy petition is filed. The bankruptcy code requires an attorney to add up all of a filer\u2019s gross income for the pre-bankruptcy filing 6 month period and then determine an average.\u00a0 Then, the bankruptcy code requires an attorney to multiply the average by 12 to determine what a filer\u2019s yearly projected income is and analyze it against the state average income for a household of the filer\u2019s size.\u00a0 If the filer\u2019s income is in excess of the state average income for a household of the filer\u2019s size, then the person would probably have to file a Chapter 13 instead of a Chapter 7.\u00a0 For instance, presume a single person needs to file for bankruptcy relief and that he or she earned gross monthly income of $5,000.00.\u00a0 Presume further that the state average income for a household of 1 in Minnesota is $52,785.00.\u00a0 The bankruptcy code would require the attorney to add up the $5,000.00 for the preceding 6 months which would be $30,000.00.\u00a0 Then, the bankruptcy code would require the attorney to determine the monthly average which would be $5,000.00 ($30,000.00 divided by 6).<\/p>\n

Next, the bankruptcy code would require the attorney to multiply that average by 12 which would be $60,000.00 to determine the filer\u2019s yearly projected income.\u00a0 Since the $60,000.00 would exceed the state average income for a household of 1 in Minnesota of $52,785.00, the filer would probably be required to file a Chapter 13 bankruptcy because he or she would not have passed the Means Test.\u00a0 The monthly income average is measured against some expenses and payments of some debts, so it\u2019s still possible for filers with a high income to qualify for Chapter 7<\/a>. If a filer doesn\u2019t qualify for Chapter 7 and must instead file for Chapter 13, the expenses of a household are still subtracted in the total of disposable income that must be used to repay creditors<\/a> through a Chapter 13 repayment plan.<\/p>\n

Credit Counseling<\/strong><\/p>\n

Another notable change made with the 2005 bankruptcy overhaul was the requirement of all filers to undergo credit counseling<\/a> before a petition is filed. The United States Trustee office must also approve the counselors who offer this service. This is necessary requirement irrespective of whether you file for Chapter 7 or Chapter 13 bankruptcy. A counselor may offer an advisable repayment plan in cases of Chapter 13 bankruptcy, but filers are not obligated to follow those plans.<\/p>\n

These changes made in 2005 were also accompanied by several other minor details but overall, they were designed to create a situation of fairness for all parties involved in a bankruptcy case. For more information about the changes made or for help with filing for bankruptcy in Owatonna, MN, contact Behm Law Group, Ltd. at (507) 387-7200 today.<\/p>\n","protected":false},"excerpt":{"rendered":"

As with all departments of US legislation, bankruptcy is an ever-changing legal process. Because the status of finances and the economy are rapidly transforming with the development of new technology, new energy, and new ways to spend, save, and make money, the laws that govern how debt is handled must change accordingly. Since 2005 the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[37,30,29],"tags":[],"aioseo_notices":[],"yoast_head":"\nBankruptcy in Owatonna since 2005 - Behm Law Group<\/title>\n<meta name=\"description\" content=\"Bankruptcy has changed a lot over the years, but since 2005 most laws and regulations around it remain the same. 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