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When insurmountable debt trouble leads people to file for bankruptcy, they often find themselves stressing over the Chapter 7 means test. Specifically, the Chapter 7 means test will start with the seemingly daunting Official Form 22A – Determination of Presumption.

While this eight-page document is meant to ensure that only the most “qualified” of filers use bankruptcy as a way to eliminate their debt, the Chapter 7 means test is clearly not meant to frighten or intimidate filers.

When determining whether an individual qualifies for bankruptcy protection, the bankruptcy courts will first determine whether the person filing meets the median income level determined by the Census Bureau for their specific state. As far as the Chapter 7 means test is concerned, if income is anywhere below the median, then the determination of presumption will be made.

As for median income levels, they are readily available on most websites that discuss bankruptcy and its process. The median levels for single people range anywhere from a low of $32,348 in Mississippi to a high of $57,505 in Connecticut.

Continue reading ‘Exploring the Chapter 7 Means Test’ »

When the debt starts piling up, this can be very stressful time for just about anyone. As a result, many people find themselves having no other choice but to declare personal bankruptcy. Of course there are many advantages to having your debt wiped clean and allowing you to start with a fresh slate, is also important to keep in mind that there are many different consequences associated with declaring bankruptcy. These choices can affect you for the next several years to come.

For starters, your credit rating score will definitely suffer as a result of filing chapter 7. While some people may not care about this drop in credit rating, many others may have a serious issue with it. You just have to remember to think ahead and to figure out exactly what is more important to you on the road to come.

Eventually, if you are like many people you will want to purchase a car or maybe even a washing machine or potentially a home. With poor credit, all of these purchases can be downright impossible for some people; and when you choose to file Chapter 7 bankruptcy you are making the task even more difficult.

Continue reading ‘Declaring Personal Bankruptcy – Understanding Its Consequences and Impact on Your Life’ »

When somebody says they’re going to file for bankruptcy it sounds easy right? Well, in order to file for bankruptcy there are some steps that need to be followed. There are 3 changes that now affect people before filing and they are the ticket in, the means test, and the ticket out.

Ticket In – If you want to file then you need to go to a credit counseling session. You need to attend this credit counseling sessions six months before you apply to file for bankruptcy. Also, your session cannot be done by just anyone. They need to be approved by the United States Trustees office.

Means Test – This is a test that is required under the new law. Your income is tested using a two part means test. This is a formula to determine if you’re going to be able to afford 25% of your unsecured debt. Unsecured debt is things like credit card debt. From there they will determine how your income looks compared to the states average. Depending on what your income looks like compared to the state average will determine if your able to file for Chapter 7 bankruptcy.

Continue reading ‘These 3 Steps That Are Required Before You Can File For Bankruptcy’ »

One of the most frequent questions that any Washington bankruptcy attorney is asked during an initial consultation is whether or not someone contemplating filing for bankruptcy can keep their car. For the most part, the answer is yes.

In the vast majority of situations, clients who want to keep their car and who have the ability to stay current on their monthly payments are able to retain their automobile after filing for bankruptcy in Pierce County, Washington. Depending on whether you are filing a Chapter 7 or a Chapter 13 bankruptcy, and depending on whether you utilize the federal exemptions or the state exemptions, their is typically a way to safeguard any equity in your vehicle from being seized by the trustee.

Continue reading ‘Keeping Your Cars in Bankruptcy’ »

Chapter 13 bankruptcy is a repayment plan, sometimes called a “wage earners’” plan. It allows people that have a regular income to repay all or part of their debts. With a chapter 13, a repayment plan is proposed that will make payments to the creditors over a three to five year period. The court will approve the plan, or revise it based on the debtor’s situation and eligibility. A chapter 13 also has its own advantages compared to a chapter 7.

The Advantages

There are several advantages that a chapter 13 offers over a chapter 7. One of the most significant advantages is that a chapter 13 allows people the opportunity to save their homes from foreclosure. A chapter 13 can stop the foreclosure process and may resolve past due mortgage payments. A chapter 13 also allows the individual the ability to pay other secured debts they may have incurred over the span of the bankruptcy (3-5 years). This may also lower the monthly payments of those debts. This chapter may also protect co-signers of those debts. The final advantage of a chapter 13 is that it acts as a consolidation loan. This means that the debtor will make payments to a trustee overseeing the bankruptcy and distribute those payments to the individual creditors. As a result the debtor will have no contact with the creditors which may prevent many financial headaches in the long run.

Continue reading ‘Chapter 13 Bankruptcy Explained’ »

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Choosing to file for bankruptcy is a very tough decision but sometimes it is necessary. If you do not foresee any possible way to pay all your debts you may have to file. Once you have filed for bankruptcy creditors can no longer legally call you, you wont have to worry about eviction and you wont have to deal with foreclosure. There are a few different ways to file, some better for different situations.

There are two ways to typically go about bankruptcy. Chapter 7 bankruptcy means that you will not have any debts. (except in special cases i.e. Child support, alimony, student loans, etc..) Many cannot qualify for Chapter 7. You must be in the lower fifty percent of income makers and show that you wouldn’t be able to pay for the debts even if the debt was lowered. You don’t only loose your debt though. Many of your assets will be liquidated. This means that your possessions can be put up for sale to pay of some of the debt that you owe. While dropping all that debt at once would be nice, Chapter 7 can bite you as well.

Continue reading ‘How Should You File Bankruptcy’ »

One of the biggest challenges of the average consumer today is how to budget his money wisely. Because of the rising costs of many commodities as well as other financial obligations, it isn’t a surprise that millions of Americans are facing a crisis. People fall into huge amounts of debt, businesses fail, and payables remain unpaid. When worse comes to worst, there may be no other way but to file for bankruptcy. If you find yourself in such a situation, then it is high time to get the help of bankruptcy lawyers.

Bankruptcy lawyers may also be considered under the category of family lawyers, since they help settle family-related matters that involve the use of money and properties. Depending on your current financial status, a bankruptcy lawyer can determine your best ways of settling with the parties you are indebted to, or how you can pay off your debts. Take note that not all dire financial situations call for the filing of bankruptcy. Bankruptcy lawyers make it possible for you to assess your current standing, and assist you in getting back on track to a better financial status.

Continue reading ‘When a Bankruptcy Lawyer is Needed’ »

Chapter 13 bankruptcy is a repayment plan, sometimes called a “wage earners’” plan. It allows people that have a regular income to repay all or part of their debts. With a chapter 13, a repayment plan is proposed that will make payments to the creditors over a three to five year period. The court will approve the plan, or revise it based on the debtor’s situation and eligibility. A chapter 13 also has its own advantages compared to a chapter 7.

The Advantages

There are several advantages that a chapter 13 offers over a chapter 7. One of the most significant advantages is that a chapter 13 allows people the opportunity to save their homes from foreclosure. A chapter 13 can stop the foreclosure process and may resolve past due mortgage payments. A chapter 13 also allows the individual the ability to pay other secured debts they may have incurred over the span of the bankruptcy (3-5 years). This may also lower the monthly payments of those debts. This chapter may also protect co-signers of those debts. Continue reading ‘Chapter 13 Bankruptcy Explained’ »

You may be surprised to know that at least 50% of the population has some form of poor or adverse credit. This may have been due to late payments, missed payments, longer term arrears, defaults, CCJ’s or even bankruptcy. However, having a poor credit rating doesn’t stop life from carrying on. So what do you do if you have bad credit and desperately need a loan?

Every bank you approach greets you with a firm no. You try your luck at credit unions and any other financial institution you can think of, but are always greeted with the same negative response. Due to the sudden economic decline of the past few years and the fact that approximately half of all people have poor credit, there are now a new wave of companies who provide guaranteed bad credit loans.

Usually to obtain a loan, you need a good credit score, a regular income and your financial affairs should be in good order. With the institutions who give guaranteed bad credit loans, rather than approving or declining by your credit rating, they prefer to lend based on affordability.

Continue reading ‘Guaranteed Bad-Credit Loans – What to Expect When You Need a Loan and Have a Poor Credit Rating!’ »

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Whenever we look at debt elimination options, we often consider the best ways to keep our existing assets while simultaneously getting rid of the unsecured debt, typically credit cards with high balances and high interest costs. This all-too-common scenario leaves debtors with two options: Chapter 13 bankruptcy is the most obvious and, perhaps less obvious is settlement debt relief. At first, they seem like very similar options. Let’s take a closer look:

Chapter 13 Debt Relief

Folks looking to use Chapter 13 for debt elimination purposes quite rapidly realize that this bankruptcy option gives them the opportunity to hold on to their most-prized assets like the home and personal vehicles while simultaneously washing their hands of credit card debt (and all other unsecured credit debt).

Debt Settlement

Similar to Chapter 13 bankruptcy, settlement debt relief allows the debtor to tidy up their credit card debt, leaving all assets (and not just those used for security on loans) untouched by a third-party trustee. Notice that “tidy up” is not the same as “wipe it clean” as it would be in Chapter 13. Instead of getting a free pass, debtors who use the debt settlement option essentially have their debt reduced to a more-manageable level, providing the much needed relief they need.

Continue reading ‘Chapter 13 Bankruptcy and Settlement Debt Relief – Exploring the Differences’ »

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