Many people today who file for bankruptcy do not even realize that bankruptcy is under federal jurisdiction. The United States Constitution required Congress to enact uniform bankruptcy laws. Although bankruptcy is governed by federal law, it will vary from state to state. The core structure was created by Congress and administered by the United States Bankruptcy Court, which is federal. Regardless of whether the code is federal in nature, each state will have its own provisions under the law. For example, filing for Chapter 7 bankruptcy requires that a person now qualify under the means test. Basically, the means test looks at six months of a person’s income and then divides it by six and multiplies it by 12, which gives the individual their average annual income. To qualify, the person filing bankruptcy must earn less than their state median income. The federal government website has a median income table that is generally updated twice a year. So someone who lives in California and earns $ 50,000 a year will qualify to file for Chapter 7 bankruptcy, while someone in Arizona will not qualify.

The areas of bankruptcy law that differ most notably are those of bankruptcy exemption laws. The bankruptcy code has a standard federal exemption that can be used, but most people choose not to participate and use their state’s bankruptcy exemptions. Depending on the state in which you reside, the exemptions can be very generous for some. Some states will allow a person to protect everything that has to do with work, such as their tools, while other states will have a limitation of a few thousand dollars. Rural areas will generally have special provisions for agricultural equipment and things associated with it. One of the most popular exemptions that many people have heard of is housing. Again, the homestead exemption will vary from state to state and is generally related to property values. Some states, like Texas, allow an unlimited amount of home equity and some smaller states can be as low as $ 25,000.

Due to the complexity of the laws, it is important for the person filing bankruptcy to consult a bankruptcy attorney in their area. A local bankruptcy attorney will know the ins and outs of your state’s bankruptcy code and even down to the district where the individual files. Being represented by legal counsel allows the individual to enter the 341 meeting with confidence knowing that they are being protected to the extent of the law. It is legal and possible to file for bankruptcy on your own, but it is not advisable, especially since the great reform of the bankruptcy code in 2005. A bankruptcy attorney You will know what is expected of the bankruptcy court in that area and you will know what are the acceptable bankruptcy exemptions to use. If someone was going to have surgery, they would not ask their neighbor for help, they would seek the help of a surgeon. As with filing for bankruptcy, to get the maximum benefits, you need to be represented by professional legal counsel.