The means test was devised by Congress in the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act to help protect creditors from abuse by debtors whom formerly had filed bankruptcies in a serial fashion. The number of times an individual can file within a certain time frame was introduced into the law to help alleviate such practices. In order to qualify to file a chapter 7 bankruptcy, a filer has to be able to pass the means test. What happens if you are slightly over the means test? (more…)

One California debtor recently blogged his bankruptcy story over a bankruptcy website. The debtor has fallen on hard times due to a cocaine addiction, but rehab has given him a fresh new start. He lost his job and now makes 1/3 of his former salary. He owes unsecured creditors $90,000 and the IRS $35,000 in back taxes. His assets include a home with about $100,000 to $150,000 equity. He is being totally overwhelmed with collector calls, can only pay for food and mortgage payments, and wants to know what to do. (more…)

When my sister divorced, she settled for a lot of her former spouse’s credit card debt in the divorce decree. Now having too much debt for her single salary to ever completely pay off the principal with interest, she had to file for bankruptcy protection. In her case, she filed a chapter 13 bankruptcy to satisfy the divorce decree in paying the debts and because she had a certain amount of non-exempt assets she needed to protect. What about those of you who inherit credit card debt from a divorce and qualify for filing a chapter 7 bankruptcy? (more…)

A lot of questions from new bankruptcy filers can arise about filling out Form B6B for filing a chapter 7 bankruptcy. The form is generic and appears to ask for detailed information in a very small space. How should a filer handle this? (more…)

Can you stay and pay for your home after filing bankruptcy, or do you have to surrender or reaffirm your home? This question is asked by a lot of bankruptcy filers in connection with whether or not they intend on keeping their principle home. Technically, if your bank is willing, there is no reason you cannot stay and pay after filing for bankruptcy protection. (more…)

English: Part of Title 11 of the United States Code (the Bankruptcy Code) on a shelf at a law library in San Francisco. (Photo credit: Wikipedia)

If you are filing a Chapter 7 under Maine bankruptcy law, how the courts view and enforce the automatic stay becomes more important because of the limitations on your personal exemptions. The automatic stay of bankruptcy is mostly the same regardless of which state you have to file bankruptcy, but all bankruptcy courts have a certain amount of leeway to interpret and enforce the bankruptcy laws to fit each case. (more…)

Seal of the United States Internal Revenue Service. The design is the same as the Treasury seal with an IRS inscription. (Photo credit: Wikipedia)

What happens to a second lien when the second lien holder writes off a discharged debt from filing a Chapter 7 bankruptcy? (more…)

English: Part of Title 11 of the United States Code (the Bankruptcy Code) on a shelf at a law library in San Francisco. Photographed by user Coolcaesar on March 14, 2009. (Photo credit: Wikipedia)

If you are thinking about filing a Chapter 7 bankruptcy in Texas, there are some things you might want to consider. (more…)

English: Logo for Credit Union 1 – Alaska (Photo credit: Wikipedia)

Reaffirmation of a secured loan is not a very good idea most of the time. Reaffirmation of a secured loan with a credit union can be a very bad idea if all cross collateral is not removed. (more…)

English: Part of Title 11 of the United States Code (the Bankruptcy Code) on a shelf at a law library in San Francisco. (Photo credit: Wikipedia)

A  Chapter 7 bankruptcy, commonly called liquidation bankruptcy, is all about the liquidation process. A Chapter 7 is the simplest form of bankruptcy an applicant can file. Under Title 11 of the United States Bankruptcy Code, a debtor must list all of the assets they possess when filing for bankruptcy protection. These assets include any exempt and non-exempt assets. State and federal bankruptcy laws determine which assets are exempt or non-exempt within each bankruptcy jurisdiction. (more…)