It’s important to seek the advice of an experienced bankruptcy attorney to decide if bankruptcy is right for you. I offer consultations to help you in this decision. In this article, I will explain the 3 major areas I consider when advising clients.
1. Do I QUALIFY to file a Chapter 7 bankruptcy?
Prior Bankruptcy Case?
If you have filed a prior Chapter 7 case, has it been more than 8 years ago? Even if it hasn’t been that long, it’s never too early to start planning.
Income?
There are really 2 income tests. I call the first one the artificial formula one. This test is arbitrary and uses census bureau figures. It generally requires that you be under the “state median income for a household of your size.” I call the second test the “real life budget test.” This counts all sources of monthly income and expenses. For example, if you bring in $2,500 per month and your expenses are close to that, you would qualify.
2. Would I have to give up anything I own?
Some or all of your assets may be protected as “exempt.” This is a tricky area of law but obviously very important. For example, your exemptions depend somewhat on whether or not you own a home. If you do, your home is usually protected, but then you get a smaller amount for other miscellaneous items. Also, the court would generally not take something you are paying on to keep, like a car that you owe money on.
3. What would the Chapter 7 case accomplish?
First, I’d want to make sure that you have the types of debts that Chapter 7 would eliminate. Almost all debts are eliminated other than student loans or recent tax debts. Besides eliminating debts, filing would probably also improve your credit rating, stop harassment, and prevent creditors from seizing your assets and income. The answer to this question is almost always “yes,” that it would “accomplish” good things.
Because accomplishing the good things is the goal, it is extremely important to make sure the other two areas mentioned above are discussed thoroughly with your bankruptcy attorney.
Peter Blinn
For over 35 years, listening to clients and putting them at ease, while finding solutions and helping achieve future goals, in Marion County, Lake County. Citrus County, Sumter County, and The Villages.
