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The holiday season means more bankruptcy filings

No one is safe from financial insecurity. For many Americans one of the most difficult times financially is the holiday season. The current economic climate and slow job growth this year is likely to have an even harder effect on the family budget this holiday season than usual. With so much pressure and mounting debt it does not take much to push a person over the limit. In fact, a single unforeseen bill or cost might be enough to send a person into bankruptcy.

Tennessee residents understand how difficult it can be just to get by, which is why some chose to file for Chapter 7 bankruptcy. Chapter 7 bankruptcy, also known as liquidation bankruptcy, allows consumers to wipe out the majority of their debt, with some exclusions, and get back to square one. Chapter 7 bankruptcy has long been the preferred choice for most consumers. Unfortunately, there have been some attempts to make it more difficult.

In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act took effect. The Act took considerable steps to increase the restrictions on filing for Chapter 7 bankruptcy. To accomplish this goal, the Act created a means test. The new test effectively disqualified many potential bankruptcy filers from discharging their debt. Instead, consumers with high incomes are now redirected towards Chapter 13 bankruptcy, also known as reorganization.

Despite the changes brought about by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, many consumers are still eligible for Chapter 7 bankruptcy. To determine whether an individual consumer or household is eligible for Chapter 7 bankruptcy it is important to consult with a bankruptcy attorney. A bankruptcy attorney can walk the consumer through the means test and determine if the consumer is eligible for Chapter 7.

Source: Windy City Times, "Bankruptcy can be a new beginning," Roger McCaffrey, Oct. 30, 2012

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Mark T. Young & Associates
2895 Northpoint Blvd.
Hixson, TN 37343

Toll Free: 888-376-0282
Phone: 423-933-1606
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