Bankruptcy-What you should know about the Means Test in Chapter 7?

November 6th, 2013

Individual debtors filing chapter 7 must complete form 22A. The first step is to calculate the annual salary. That consists of adding up the last six months of income and dividing by six and multiplying by twelve. If that number is beneath the “median income”, that debtor qualifies for Chapter 7. If that number exceeds the Median Income, than there are further calculations with allowable deductions to see if the debtor may still qualify fo... Read more

Bankruptcy-What are Non Dischargeable debts?

October 28th, 2013

Unfortunately, Congress has decided that not all debts are dischargeable in bankruptcy. The most common Non-Dischargeable debts are: Certain taxes, Child support, Alimony, Fines and penalties owed to government agencies, Student loans, Debts incurred through fraud. Collection actions on such non-dischargeable debts must stop upon the filing of the bankruptcy petition, but the debt survives the bankruptcy and the debtor must repay once the c... Read more

Bankruptcy-What is the Discharge?

October 21st, 2013

The primary reason for a person to file bankruptcy is for the entry of a discharge. When a debt is “discharged” it means that the debt is no longer enforceable against the debtor. Essentially the debt is wiped out. The scope of the Bankruptcy discharge varies depending on what type of case the debtor files: Chapter 7, 11, 12, or 13. It is also entered at different points in the case depending on the type of bankruptcy. The bankruptcy di... Read more

Bankruptcy-What is the role Trustee and the Property of the Estate?

October 14th, 2013

The filing of a bankruptcy case creates an “estate” comprised of all of the debtor’s property which is not subject to the debtor’s allowable exemptions. The estate is overseen by the Trustee. The Trustee is usually a lawyer appointed by the bankruptcy court to review and verify that all the information you provided on your bankruptcy petition is true. They are also charged with a duty to protect your creditor’s interests. If the T... Read more

Bankruptcy-What are bankruptcy exemptions?

October 7th, 2013

The concept behind bankruptcy is a “Fresh Start” a second chance at a new beginning. Well, if you are left with nothing, broke and naked, it would be practically impossible to start over! So, the bankruptcy code provides for certain properties to be held to exempt from creditors, meaning that you are allowed to keep them. For example, you have a homestead exemption which allows you to protect the equity in your home up to a certain amou... Read more

Bankruptcy-How does the Automatic Stay protect your assets?

October 1st, 2013

Often, clients come to me after they have been sued by a creditor, and they are worried that a creditor will exercise a lien or garnishment on their assets. Fortunately, Bankruptcy offers protection under section 362 of the code. The “automatic Stay” is perhaps the most important protection provided to debtors. It is a powerful tool that stops creditors in their tracks. The automatic stay is the creditor’s nightmare, and the debtor’s b... Read more