Bankruptcy Laws in Wyoming
Both Federal and Wyoming bankruptcy changed in 2005 when the President passed an act that placed new restrictions on bankruptcy. The bankruptcy process increased from a few documents up to twenty different documents.
The 2005 Bankruptcy Act also placed new restrictions on who may apply for Chapter Seven bankruptcy and placed increases on Chapter Thirteen bankruptcy’s monthly payments. Through this new act credit counseling is now mandatory at least six months prior to filing for bankruptcy. A financial management course is also required once the bankruptcy process is complete.
Wyoming Means Test
A means test is also a new requirement in order to analyze which form of bankruptcy an individual may qualify. In past years the bankruptcy process has been abused and used in cases where it was not needed, especially Chapter Seven bankruptcy. To inhibit this abuse issue the government installed new abuse prevention acts to minimize the amount of people who have access to bankruptcy courts.
The means test is another system for eliminating those who can find their way out of debt without bankruptcy. Bankruptcy is for those who have encountered extremes in debts due to outside interference. Some of these instances can include the loss of employment, a recent divorce, an extending illness requiring hospitalization, or the loss of an important client.
The means test will compare an individual’s personal income and expenses to those of all other Wyoming citizens. Upon evaluation a median level will be calculated. If the individual comes above the median he or she will qualify for Chapter Thirteen bankruptcy. If the individual comes below the median he or she will qualify for Chapter Seven bankruptcy.
The means test will also identify how much an individual can pay towards his or her debts each month. If an individual can pay only one hundred dollars or less a month, he or she will qualify for Chapter Seven bankruptcy. If an individual can pay up to one hundred sixty-six dollars a month, he or she will qualify for Chapter Thirteen bankruptcy. All those who fall in between these two barriers will normally qualify for Chapter Seven bankruptcy.
Chapter Thirteen Bankruptcy
Chapter Thirteen bankruptcy is the means for allowing individuals to relinquish their debts by using their own income. The bankruptcy court will evaluate an individual’s income, personal expenses, household situation, and debt. Upon evaluation the court will create a specific plan for the individual’s circumstances.
This plan will outline how much is required to be paid towards debts for a maximum of five years. After this five-year time period all the debts will be eliminated.
Chapter Seven Bankruptcy
Chapter Seven bankruptcy is the means for allowing individuals to relinquish their debts by liquidating their non-exempt property. The court will assign a trustee to the case who will liquidate all the non-exempt property for their current values and use the new funds to pay off creditors.
Some property is not eligible for sale and can include homes, real estate, appliances, furniture, and motor vehicles. This entire process can take anywhere between three months and six months.