The Exemptions Allowed under the Bankruptcy Code The 2005 revisions to the American bankruptcy laws imposed a new hurdle that must be cleared before you can seek to discharge debts under Chapter 7. As a general rule, you must submit to a means test, demonstrating that you lack the resources to repay your creditors in a reorganization under chapter 13. Unbeknownst to most people, though, there are … [Read more...]
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The Income Calculation for the Chapter 7 Means Test
What Is Included in the Determination of Income When You Want to Discharge Debt? Under the current bankruptcy laws, to qualify to permanently discharge debts in a Chapter 7 proceeding, you must undergo what is known as the "means test." The purpose of the means test is to establish whether you have disposable income or other resources to repay your creditors in a reorganization under chapter 13. … [Read more...]
Your Best Bankruptcy Option When You Have Unmanageable Student Loan Debt
When Can You Get Relief in Bankruptcy from Student Loan Debt? Have you racked up a substantial amount of student loan debt, only to find a really tough job market when you graduated? Even if you've been able to find some work, chances are good that your student loan obligations take a significant portion of your disposable income, making it difficult to meet your other needs. You may have … [Read more...]
Legal Actions That Are Unaffected by a Bankruptcy Filing
The Automatic Stay Does Not Suspend All Legal Proceedings When you seek protection against creditors by filing a personal bankruptcy petition, you immediately receive the protections afforded by the automatic stay. That prohibits your creditors from calling, writing or taking legal action against you in an effort to collect the debt (other than through the bankruptcy proceeding). Any lawsuits … [Read more...]
Discharging Credit Card Debt in Bankruptcy
Avoiding Concerns about the Fraudulent Use of Credit before a Bankruptcy Filing Unmanageable credit card debt commonly contributes to a decision to seek protection under the bankruptcy laws. Because credit card debt is an unsecured obligation, you can permanently discharge credit card bills under Chapter 7. You must be careful, though, that you don't engage in activity prior to your bankruptcy … [Read more...]
Can You File for Bankruptcy More than Once?
The U.S. bankruptcy laws were enacted to help people get a fresh financial start, granting debtors some relief from the incessant phone calls, letters and legal action that typically accompany efforts to collect a debt. As a part of the bankruptcy process, debtors are required to undergo financial counseling, a process that often prevents further financial difficulties. But what if the unexpected … [Read more...]
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The Benefit of Filing Bankruptcy Quickly if Your Income Has Increased or Is About To
To qualify for Chapter 7 "straight bankruptcy" you must pass the means test. Otherwise you would likely end up in the much more time-consuming and expensive Chapter 13 "adjustment of debts." Chapter 13 is great if you need its benefits, but not if you are forced into it and would prefer the much simpler fresh financial start of Chapter 7. Taking Advantage of the Odd Means Test Definition of … [Read more...]
Dealing with a Recent One-Time Income Event for the “Means Test”
The Chapter 7 Means Test This test was designed to screen people away from Chapter 7 "straight bankruptcy" and towards Chapter 13 "adjustment of debts." Those who could afford to pay a meaningful amount to their creditors are legally required through the means test do so under Chapter 13 instead of being allowed to discharge (legally write off) their debts under The means test looks at your … [Read more...]
You May Not Need to Take the “Means Test” if You Are a Business Debtor
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...]
