Bankruptcy can be a great tool for those who are pressured by financial hardships into struggling to make their debt payments. Although the process can be quite tedious, the government has always worked to ensure borrowers were able to get a fair chance at successful debt resolution. While many of the benefits will remain the same, the federal government is changing some aspects of the process in the upcoming months.
Change Is Coming
The Feds have approved an increase in filing fees associated with both Chapter 7 and Chapter 13. The fee for filing a Chapter 7 case will increase from $299 to $306 and the fee for filing Chapter 13 will increase from $274 to $281. The higher filing fees are not a huge increase, but are just another strain on those who are already financially strapped.
The increase in filing fees also comes with stricter qualification standards for anyone seeking Chapter 7. To qualify for Chapter 7, a borrower must pass the means test, which determines if their income is equal to or below the state wide median income. The test is used to determine whether a person could afford to repay their debts through Chapter 13, thus weeding them out of qualifying for Chapter 7.
The changes occurring for Chapter 7 qualification are attributable to decreased in state wide median income levels. Since the means test is based on the median income of the state, not everyone will be effected by this change, just those who lives in a state with a decreasing median income level.
Both the filing fee increase and tightening of Chapter 7 qualification standards will expected to change beginning November 1st of this year. Anyone considering Chapter 7 is advised to contact a bankruptcy attorney to review their case.