More and more people are facing tough times lately. They have a lot of debt, and may not be able to see the options available to them to know. There are many ways in which the debt. You must do research to find out what the best alternative for you. You can get help for [...]
View full post on site– Oklahoma Bankruptcy News
In recent years, bankruptcy has become the only outlet for many people suffering unbearable debts. According to U.S. law, a firm, association, company or a person like you and me, to obtain relief from debt under Chapter 7 bankruptcy.
Last year, October 17, 2005, a new bankruptcy law was approved and the check has been introduced. It also determines whether or not they are eligible to file under Chapter 7. The point behind the evidence is to determine if you have enough money left to repay part of the money you owe to your creditors or not, after all your allowed living expenses taken into account.
E ‘calculated by subtracting the IRS allowed a subsistence income monthly.
If the income after the calculation seems to be less than or equal to the average income of state you live, probably will be allowed to file under Chapter 7.
However, if the income seems to be bigger then the average income of the state you live in the channel of income for the last six months should be considered or could be forced under Chapter 13 bankruptcy.
Some of the costs considered are:
1. Utility
2. Food
3. Clothing
4. And transportation of natural gas accounts
5. Mortgage loans
6. Car loan
7. child support
8. Tax
If on the other hand, after deducting all costs less than $ 6,000 left to pay creditors (their dishonored) over the next five years will be forced to declare Chapter 13 instead.
Moreover, according to the 2005 bankruptcy law, you must submit all tax returns late, if you want to apply for Chapter 7.
If during the 180 days of the application process your case be dismissed because of the intentional failure by you to comply with court orders and refused to declare bankruptcy under Chapter 7.
Also, if the debtor has rejected the case earlier in the will after the creditors have asked for relief from the bankruptcy court, a petition will be denied.
2005 bankruptcy law has brought another major change, as a person that are now needed to get advice from a credit counselor certificate before applying for Chapter 7 bankruptcy.
The purpose of credit counseling is to educate you and help you to reorganize your financial affairs. If you are serious about filing for Chapter 7, you must provide the court with the debt management plan you’ve developed over the credit counseling within 180 days before filing for bankruptcy.
View full post on site– Bankruptcy Case Blog
When you file a Chapter 7 bankruptcy petition, the means test is applied to make sure that you really need to file bankruptcy and that you aren’t “abusing” the system. That might sound confusing, but it’s in most cases a simple test, and the majority of debtors do ultimately qualify for Chapter 7 bankruptcy.
The Chapter 7 means test can be thought of as consisting of two stages:
The first stage of the test compares a calculation of your annualized income, based on your average monthly gross income over the 6 months before your petition is filed, to the median income for your area and household size. If your monthly income falls at or below the median, the means test is over – there is no ‘presumption of abuse’ and you can file for bankruptcy under Chapter 7.
That median is determined by your geographic location and the size of your family. In the state of Pennsylvania, for example, the median income figures for cases filed on or after 10/1/2008 are as follows:
· Household size 1: $43,036
· Household size 2: $51,051
· Household size 3: $64,775
· Household size 4: $75,867
If your income exceeds these medians, it doesn’t necessarily mean that you can’t file under Chapter 7. Instead, it triggers the second stage of the test. In this second step, allowable expenses (which are based on regularly inflation-adjusted IRS standards, such as the standard $489 deduction allowed for the debtor’s car payment expense) are deducted from your monthly income. The amount that’s left over after those allowable expenses is your ‘disposable income’. That number is multiplied by 60 to determine how much disposable income you’ll have over the next five years.
If that total is less than $6,575, the means test is again over – there is no ‘presumption of abuse’ and you can file bankruptcy under Chapter 7. If the total is more than $10,950, there is a presumption of abuse. In such a case, there is very likely to be filed against you an objection by the case trustee alleging abuse under Section 707(b). Your Chapter 7 discharge is in serious jeopardy at this point; this scenario therefore needs to be anticipated and avoided in advance.
If the total disposable income for the five year period falls between $6,575 and $10,950, then an extra calculation is necessary: Your expected disposable income over the next five year – that number between $6,575 and $10,950 – is compared to the total of your non-priority unsecured debts. If your 5-year disposable income is less than 25% of the total of those debts, the presumption does not arise.
Be aware, however, that even if you’ve “passed” the means test, the trustee can still raise the issue of ‘abuse’ if circumstances of a particular case warrant it. For example, the trustee might argue “abuse” if your income less your ‘actual’ (as opposed to the above described IRS standard) expenses still leaves enough disposable income to ‘fund’ a Chapter 13 plan. Your bankruptcy attorney will be able to tell you what sort of other circumstances might also trigger a challenge from the trustee. Again, if you are to achieve a discharge under Chapter 7, these scenarios need to be anticipated and avoided in advance.