Depending on the state where you are filing for bankruptcy, the differences come into play when you consider the median income levels required to be eligible for bankruptcy. You may also encounter different types of exemptions for property. This is why it is so important to consult a qualified bankruptcy attorney in Hawaii for the state specific information.
The Means Test
2005 marked the last major revision of the bankruptcy code in which the Bankruptcy Abuse Prevention and Consumer Protection Act was passed into law. This is what made it mandatory for all prospective applicants to take the Means Test.
When you are considering bankruptcy, you will need to complete the Means Test to see if you qualify and to show the court that you meet the filing standards. The Means Test is designed to assess the household income of the applicant, however, different states have different qualifying median amounts.
Over – Under
Chapter 7 bankruptcy is the normal choice for people whose median income is below the required amount, while people who have a higher median income than the requirement will qualify for Chapter 13 bankruptcy. If you consult with your bankruptcy attorney, they will be able to give you guidance as to which form of bankruptcy is more suited to your needs based on your personal situation.
Another variance in the regulations from state to state is that they have different laws about how your creditors can approach you for collection. Some states will allow creditors to garnish a portion of your salary to reclaim their debt. If wage garnishment is not applied, some states allow bank account garnishment.
One of the biggest draws of bankruptcy is that it usually puts an immediate stop to creditor harassment. If you talk to your bankruptcy attorney, they will advise you of all the possible actions you can take to minimize creditor harassment.