Myth: The new law makes it much harder to file for bankruptcy.

     The new law makes the process of bankruptcy more complicated, but does not necessarily make the debtor less eligible. Most people who could file for bankruptcy prior to the new law can still file. The new law requires you to pass a "means test" to be eligible to file for Chapter 7 relief, but even if you do not qualify for Chapter 7 bankruptcy, you can still file for Chapter 13. The "means test" (designed to weed out abusive filers) assesses your income to the median income for Michigan residents and compares your income against your necessary expenses. If the test shows you have disposable income of at least $166.67 per month, Chapter 7 relief is not available and you may file under Chapter 13.