How Do I Pass the Means Test for Chapter 7 Bankruptcy?
Unless you are facing an absolute emergency such as a Foreclosure sale, warrant of eviction, or bank restraint involving a large sum of money, every client should think long and hard before filing a Bankruptcy case and should seek advice from both an accountant and a Bankruptcy attorney. If you’re wondering, “Should I file for bankruptcy?” continue reading and contact our firm to discuss your options.
The American Bankruptcy Institute suggests seeking out a Bankruptcy attorney when these warning signs arise:
- Creditors have obtained judgments against you or your company
- A bank account has been frozen
- Your personal wages are being garnished
- It is beyond your ability to pay down your credit card bills or medical bills
Experts also suggest the following:
- Assess your total financial situation
- Review your income and debt with your accountant
- Review your credit report
- Talk to a Bankruptcy attorney and understand the pros and cons of filing a Bankruptcy case
- Open all of your mail. Know who is collecting against you and for how much
- Never ignore a lawsuit, Foreclosure or collection action
Who Files for Bankruptcy in America
Sometimes I have to fight with my clients to convince them that filing for Bankruptcy protection is the first responsible financial decision they have made in a long time. They are exercising a right Congress created under its Constitutional power to establish uniform bankruptcy laws, to utilize the Bankruptcy Code and the Tax Code to eliminate debt and restructure their financial situation.
Most of my Bankruptcy clients are middle class families with both spouses working, they own a home or condo, one or both spouses have a college or Master’s Degree, they have paid for their children’s college educations, or are currently paying their children’s student loans due to the fact that their children cannot find jobs after graduating college.
A recent poll describes the typical Bankruptcy filer in America as follows: a middle class head of household with children and a full-time job; better educated than the general population; almost all Bankruptcy filers suffered a personal event such as loss of employment, divorce or serious medical issues; homeowners who were defrauded into obtaining first and second subprime mortgages; seniors on a limited income with extraordinary medical expenses; unemployed or underemployed college graduates with student debt reaching $100,000.
A middle-class family that is hit by a loss of a job, divorce or illness tips straight into debt.
Deciding if Bankruptcy is the right option for you is important. Consulting with an experienced Bankruptcy attorney is best. The Law Offices of Allen A. Kolber, Esq. helps clients understand their legal options and guides them through the process if Bankruptcy is necessary. If you need quality legal support from a compassionate Bankruptcy law firm, contact The Law Offices of Allen A. Kolber, Esq. for a consultation.
When Bankruptcy Is Usually Not the Answer
Filing is not always the right move. If your only debt is a student loan, if your income and property are already fully exempt from collection so that creditors cannot reach them, or if a single creditor would settle on terms you can afford, bankruptcy may cost more than it returns. A Chapter 7 filing also stays on your credit report for ten years, and you generally cannot receive a second Chapter 7 discharge for eight years after the first. Those are reasons to price out the alternatives with an accountant before you file.
Contact The Law Offices of Allen A. Kolber, Esq.
Our firm works to mitigate the effects of outstanding debt on a person’s life. We fully understand the ramifications of filing for bankruptcy and will work through every alternative before we guide you through the process of filing Chapter 7 or 13. If you need to schedule a consultation with an attorney with over 35 years of experience, contact The Law Offices of Allen A. Kolber, Esq. for a consultation.
