The means test is the gateway for qualifying to get a fresh financial start through a Chapter 7 "straight bankruptcy" case. This test is based first on your income. If your income—based on a very distinct way of calculating it—is not low enough, then the means test also looks at your allowed expenses, based on a complicated set of rules looking at national, regional, and local expense standards. … [Read more...]
Why Every Day Can Make a Difference in Passing the “Means Test”
The Point of the Means Test This test is intended to determine if you have the "means" to pay a meaningful amount to your creditors over a reasonable time period. You have to pass the means test before you are allowed to go through a Chapter 7 "straight bankruptcy," which generally lasts less than four months, or instead are forced to do a Chapter 13 "adjustment of debts," which generally … [Read more...]
What Happens to Retirement Benefits in Bankruptcy
Protecting Your Retirement in Bankruptcy Most forms of retirement are protected when you file under any Chapter of bankruptcy. There are a few exceptions to this, so make sure that whatever kind of retirement you have is protected from your creditors. If in fact all of your retirement funds are protected, that means that if you file a Chapter 7 "straight bankruptcy" case the Chapter 7 trustee … [Read more...]
Dealing with an Expected Vehicle Repossession
Bankruptcy stops your vehicle from being repossessed, and then gives you many tools—under both Chapter 7 and Chapter 13--to either keep or surrender the vehicle. Stopping the Repossession The minute you file any kind of bankruptcy case, the “automatic stay” instantaneously stops vehicle repossession. The automatic stay is an injunction against repossession and any other collection efforts by … [Read more...]
Dealing with an Unhappy Ex-Spouse Creditor
A Chapter 13 bankruptcy - the 3-to-5-year legal procedure for “adjustment of debts”—can help you in two huge ways with an ex-spouse who is unhappy with you for not paying a debt you owe to him or her: It can discharge (legally write-off forever) non-support “property settlement” obligations owed to your ex-spouse through your divorce decree. It can give you time to catch up on child support, … [Read more...]
Dealing with a Debt Collector’s Threat to Fight Your Intended Discharge of the Debt
The goal of most bankruptcies is the “discharge:—the legal write-off of debts. If you are thinking about filing bankruptcy to get a fresh financial start through a discharge of your debts, and a debt collector tells you that you won’t be able to discharge that debt, is that true? Is it likely a valid threat? Idle Threats? Most of the time that a creditor or collector is telling you that a … [Read more...]
Good Reasons to File Chapter 13 Even When You Won’t Get a Discharge
A recent blog post discussed how you don’t have to wait the usual period of time to file a second bankruptcy case if that new case does not discharge any of your debts. Usually you would have to wait 4 years between filing a Chapter 7 “straight bankruptcy” and a subsequent Chapter 13 “adjustment of debts” one. But you don’t have to wait out that 4 or any of the usual time periods if you don’t … [Read more...]
Filing Bankruptcy a Second Time
The Rules for Time Required between Bankruptcy Filings How long you must wait to file a bankruptcy case after you’ve filed a previous one depends on both which Chapter the earlier bankruptcy was filed under and the Chapter of the new case being filed: 2 years from an earlier Chapter 13 case to new Chapter 13 one 4 years from earlier Chapter 7, 11, or 12 case to new Chapter 13 one 6 years … [Read more...]
Potential Traps in Surrendering an Out-of-State Home
If you have moved recently to New Jersey and own or recently owned a house in the state you lived in before, and you are surrendering that home to the mortgage company, that house could possibly still be a source of significant problems. Those problems can continue after you thought that the house was foreclosed. Also, there are important issues to keep in mind even after you file a bankruptcy … [Read more...]
Choosing Between Chapter 7 and 13 if You Have Student Loans
Discharging—legally writing off—student loans is quite difficult under either Chapter 7 “straight bankruptcy” or Chapter 13 “adjustment of debts.” The pertinent law, Section 523(a)(8) of the United States Bankruptcy Code, says is that a student loan is not discharged unless it “would impose an undue hardship on the debtor and the debtor’s dependents.” “Undue Hardship” Congress did not define … [Read more...]
