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Steps for filing bankruptcy in your state, from learning whether you qualify, to completing and filing bankruptcy forms, to discharging your debts and getting on with your life.
A mathematical formula—called the means test—determines whether you qualify for Chapter 7 Bankruptcy in your state.
If your creditors will negotiate, if bankruptcy can't cancel most of your debts, or if you're truly broke, bankruptcy may not be the best solution for you. Here's how to decide.
How Chapter 7 bankruptcy can help you cancel your debts, protect your exempt property, and stop bill collectors.
You can use Chapter 13 bankruptcy to get out from under the burden of your debts, protect important property, and stop bill collectors.
Tips for keeping bankruptcy costs down, from court filing fees to mandatory counseling costs to getting legal help.
Most people file for bankruptcy in the federal district court closest to where they've lived for the past six months.
This site focuses on Chapter7 and Chapter 13. But there are also chapters 11, 12, 9, and 15
From Adversary proceeding to Wage garnishment
To qualify for Chapter 7 bankruptcy, you must pass the means test, which compares your household income to the median income in your state for a household your size.
Bankruptcy helps you get rid of unsecured debt. It does not eliminate secured debts, where you have pledged collateral for a loan, such as a car loan or a mortgage. When you file bankruptcy you must declare what you intend to do about your secured debts.
The law does not require to have a lawyer, and if your case is simple and you have few assets, you can successfully file a Chapter 7 bankruptcy yourself. Chapter 13? Not so much. And if you have property to lose, or you're not great with details, getting a lawyers help can be a good idea, no matter what kind of bankruptcy you're filing. Also a lawyer may find ways to help that you haven't' thought of
Bankruptcy is federal law and you file in the local Federal District Bankruptcy Court. Find out yours.
The US government makes PDF bankruptcy forms available for free. We'll tell you which ones you need and links to download them.
Asset protection is an important benefit of bankruptcy. Exemption laws are the laws that let you protect certain assetss from creditors. Every state has different exemptions. Some states allow you to use the federal exemptions.
Yes. You must complete a credit counseling course before you file your bankruptcy petition. Fortunately, it's easy and can be done online.
Everyone who files for bankruptcy must attend a 341 hearing, which is also called a "creditors meeting." The meeting is conducted by the bankruptcy trustee assigned to your case. During the Coronavirus, it. can be done by phone.
The means test initially looks to see if your household income is above or below median for a household your size in your state.
The means test spans three forms and more than 50 questions about your income and expenses. Here's a line by line TOC with direct links to our Means Test Calculator.
The 2005 Bankruptcy Law (BAPCPA) created the means test, ostensibly to prevent people from abusing bankruptcy. The means test mans you can't file for Chapter 7 bankruptcy if your income is above the median income for your state, or your allowed expenses leave enough disposable income to fund pay some of your debts over 5 years. In fact, most people who file for Chapter 7 bankruptcy have no trouble passing the means test.
This summarizes the opinion of the United States Trustee Program (USTP) on issues that arise under each line of the means test. These statements are not the last word on the law. They're just how the trustees office interprets the law.
You can't skip the means test, but it may be very quick, if your income is below the median income for your state.
The means test can be completed very quickly if your average income for the past six months is below the state median. It takes a bit longer if your income is above the state median. But it can easily be completed in under an hour, regardless.
How many people are in your "household?" The issue can be tricky if you have roomates, or children who only live with you part time. Courts have ruled on lots of issues arising under this question.
Household income includes payments from roommate, partner, parent, or relative, regardless of whether living with you. Here's the details
A judge can still bar you from filing Chapter 7 bankruptcy if the "totality of the circumstances" under707(b)(3) make it appear you are "abusing" the process.
If you fail the means test you can still claim "special circumstances." Possible "special circumstances" are job loss or pay cut, a serious medical condition, or unusually high child care expenses. You must be able to produce proof of your expenses and that your expenses are reasonable -- and that you have no reasonable alternative.
Priority claims are debts that must be paid before all other debts. They include alimony, child support, wages you owe to workers, and unpaid taxes.
A quick summary of the main exemptions under your state law.
Every state has laws that designate certain types of property (your home, some personal possessions, tools of your trade) that are off-limits to "unsecured" creditors. Some states give you the option of using the Federal bankruptcy exemptions.
What do I do with those citations? Do I need them?
By using these exemptions listing you agree to these disclaimers. it's up to you to make sure this info is accurate, up to date, and applies to you.
If you have lived in your state for two years prior to filing, use your state's exemptions. If you've lived in your state for less than two years, the rules are more complicated...
Many states exemption laws do not protect property from certain kinds of creditors claims, such as child support, taxes, and claims of secured creditors.
You may be surprised to learn that you can protect over 1million dollars of assets in retirement accounts when you file for bankruptcy.
Insurance exemptions use a lingo all their own and some familiarity with the jargon is essential to understanding what is exempt.
If there is a judicial lien on your property as a result of a court judgment against you, you may have the right to remove it if it "impairs" an exemption on the property. You must intitiate a special procedure called an "adversary proceeding." You may need a lawyer's help to do this, and you need to make ask your bankruptcy lawyer if they charge extra fees for doing this.
Official help an committee notes for Official Form 122A-1
If you need clerical help -- not legal help -- a bankruptcy petition preparer can produce your bankruptcy court forms for a reasonable fee.
While the timing for filing for bankruptcy may not be right NOW, the time to talk to a bankruptcy attorney IS now, so you can take full advantage of the financial protections that bankruptcy law can provide, and not make "financial mistakes" in the next 18 months.
Can bankruptcy help stop an eviction? Well, it can delay it, for an extra month or two, in some cases, in some states, if you file early enough in the eviction process. And bankruptcy can be part of a broader financial strategy to keep a roof over your head. But you'll want to see a lawyer sooner rather than later to take full advantage of your options.
Find out how the CDC eviction ban works in your state. We're tracking down the latest tools and information on the internet or you to use.
The best of what's out there on the web about how to use bankruptcy law to protect your assets during the Covid-19 recession.
We've gathered links to best information on the web on the subject of COVID-19 legislation and resources that can help you keep your home during this economic crisis. We've gathered the best stuff all into the one article. -- Bookmark this page. We will revise it as we find new sources
Congress made a few important changes to the bankruptcy laws. Here’s a summary of what’s changed.
The CARES Act made an important change to the means test form to indicate that payments under the CARES act are NOT included in determining median income. This could be a great boon to those thinking of filing.
What We're Reading about Bankruptcy, Debt and Credit. Timely, useful articles, from reliable sources.
Where to read up on news about about debt, credit, and bankruptcy.
Economic Statistics that relate to bankruptcy, such as savings rates, default rates, and outstanding consumer debt, secured and unsecured, like credit card debt, student loan debt, and auto loans.
If there's changes in your state’s exemptions, here's where you'll find out about them.
Good videos and audio information about bankruptcy, for those who listen better than they read...
What we're Tweeting, in our twitter accounts @meanstest (for bankruptcy) and @lawbyzip
The latest from our blog on news and legislation that affects consumers.