A: To file Chapter 7 bankruptcy, it is necessary to show a household income below the median income for a household of the same size in the same county or you must pass what is known as the "means test." To pass the means test, your household income must be less than the median income of a household of the same size in your state. If a household income is below the threshold, Chapter 7 bankruptcy may be possible, even if the remaining disposable income is not sufficient to repay a portion of unsecured debt. These formulas can get quite complicated. It’s worth noting that if someone is eligible for either Chapter 7 or 13, all assets and income come into play.
A: Many Americans with excess debt have acquired their debts over long periods of time. While they intend to repay the debts, they may find themselves unable to do so because of unanticipated changes in circumstances such as medical emergencies, job losses or failed businesses, disability, divorce or loss of spouse. Any of these circumstances, combined with late fees, over limit fees and the extraordinarily high interest rates that creditors now charge can result in insurmountable debt.
A: Short of bankruptcy, a debtor may attempt to mediate with creditors or negotiate workout agreements to extend due dates, lower interest rates, partially forgive debt or alter other terms. A business debtor can sell the business, negotiating the satisfaction of debt as part of the deal. Other creative options to bankruptcy exist. Many debtors, however, find that their creditors are unwilling to agree to reasonable terms or are completely unwilling to negotiate.
A: Consumers usually file Chapter 7 "liquidation" or Chapter 13 "reorganization" bankruptcies. In practice, most persons considering Chapter 7 own property that may be protected from liquidation under state law so most of their debt maybe cancelled (discharged) without actually losing any of their property. Under Chapter 13 bankruptcy, the debtor repays certain debts over time (from three to five years).
A: In some instances you can include student loans and taxes in a Chapter 13 repayment plan and pay them off over time. In many cases, this will save debtors money. Also, in rare instances, these debts may be dischargeable. Firstly, you’ll need to prove that those debts are causing you an undue hardship as determined by the Brunner Test administered in many courts. You’ll also need to meet following criteria:
It’s also important to note that not all courts use the Brunner Test and may have other criteria for determining the ability to discharge your student loans. It is a heavy burden to discharge student loan debt.
A: Domestic support obligations like alimony and child support are not dischargeable in bankruptcy, nor does the filing of a bankruptcy petition stay most court proceedings dealing with family law issues. Under Chapter 7 other obligations to a spouse or child incurred in a divorce, separation or by court or government order are also not dischargeable such as property settlement obligations. Under Chapter 13 some property settlement obligations may be discharged.
A: A debtor is required to remain current on all domestic support obligations such as alimony/spousal maintenance and child support throughout the duration of the bankruptcy. If a debtor falls behind on his or her domestic support obligations during bankruptcy, the bankruptcy could be dismissed or converted from a Chapter 13 to a Chapter 7 proceeding.
A: Consumer credit reports may reveal Chapter 7 bankruptcy cases for up to 10 years from filing. Chapter 13 information can be included for up to seven years from discharge or up to 10 years from filing if there is no discharge. Account information for debts discharged under either chapter may be included in credit reports for seven years after the accounts go inactive.
A: Yes. Start by calling Andrew C. Marine Attorney at Law at 803-649-0875 today. If you are contemplating bankruptcy or have questions about bankruptcy, you should contact a bankruptcy attorney immediately. As you will likely only file for bankruptcy once in your life, you should hire an experienced bankruptcy lawyer for this very important job.