Yes the laws do change periodically, and my job as your Austin bankruptcy attorney is to stay on top of those changes. There was a major revision to the bankruptcy code in 2005, but every year Census Bureau data is used to recalculate state median income by family size. This year the new data becomes effective on November 1, and the changes are in the table.
Why is this important? To be eligible to file a Chapter 7 bankruptcy in the Austin area, you must meet the income requirements by comparing your average monthly income in the six months before you file with the median income for your family size in Texas. If your income is less than or equal to the median, you are eligible to file for Chapter 7 bankruptcy. However, if your income exceeds the state median, you can still file for Chapter 7 bankruptcy if you pass what is called the “means test.” The means test determines whether you have enough income after paying allowed expenses to fund a Chapter 13 plan in lieu of Chapter 7.
The advantage of Chapter 7 is that it is a one-time erasure of debt that can be handled legally in a matter of months. Chapter 13, on the other hand, divvies up your income to make partial payments to your creditors over a period of years. The legal fees for a Chapter 13 are far higher, and you have to be psychologically steeled for the years of this burden.
My practice involves a lot of math and a close attention to timing. You may be eligible for Chapter 7 one month and not the next, depending on circumstances positive or negative such as anticipated salary changes and looming major expenses for health care. While your personal situation varies, I have to be aware of changes like the median income tables and often re-examine dozens of client files to see if these changes have changed family eligibility. Just a few dollars of monthly income one way or the other can make a difference. It’s not rocket science, but it is a matter of detailed math.
The bottom line to all this is that you should depend on me as your Austin bankruptcy lawyer to guide you through the process at the right time and using the latest numbers that are correct for your case. My job is to crunch the data you provide to insure that your situation is presented to the US Trustee with a view to the desired outcome for you and your family.