The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) introduced the bankruptcy means test. The means test is required for individual debtors with primarily consumer debts who file under any bankruptcy chapter, but Chapter 7 bankruptcy in particular requires an individual to “pass” the means test. The Chapter 7 means test is intended to prevent people with a certain amount of disposable income (even as little as $150 per month) from discharging a large portion of their debt. The bankruptcy means test is not always a cut and dried matter. Bankruptcy courts around the country – as well as the U.S. Supreme Court – have ruled on means test issues. Because the means test is a complicated aspect of bankruptcy law, and because you must pass the Chapter 7 means test in order to be eligible for a Chapter 7 discharge, it is important that you let a…
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Loan mods. Workouts. Bankruptcy. Which is the best way to save your home? A recent article, The Homeownership Experience of Households in Bankruptcy by Professor Sarah W. Carroll, of the University of Pennsylvania Law School and Wenli Li, of the Federal Reserve Bank of Philadelphia, provided the first in-depth analysis of the homeownership experience of homeowners in Chapter 13. Its conclusions mirror what most bankruptcy attorneys personal experience has been: Chapter 13 is one of the most effective ways to let you save your home. The study followed homeowners who filed for Chapter 13 between 2001 and 2002 in New Castle County, Delaware, from the time of their filing to October 2007. (Since most Chapter 13 plans last five years, this was a fair trial period.) After analyzing the data, it found two important results: First, the Chapter 13 filing was not always the solution: 27.9 percent of filers lost…
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Interesting question for the day from Bankrate.com – If you are in Chapter 13 bankruptcy and want to convert to Chapter 7 bankruptcy, do you have to meet income requirements in order to file Chapter 7? Yes, you must meet Chapter 7 requirements in order to convert from a Chapter 13 bankruptcy to a Chapter 7. Chapter 13 is a repayment plan of some or all of your debt over a three to five year period. While there are myriad reasons for filing Chapter 13 bankruptcy, it is usually for one of these three: The household income is too high to qualify for a Chapter 7. To get caught up on delinquent mortgage or car payments. To protect a valuable asset that cannot otherwise be protected in a Chapter 7. These reasons mean you’ll be in a court-monitored repayment plan for some or all of your debt. A Chapter 7…
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