The “Means Test” is imposed by the U.S. Bankruptcy Code to help debtors, trustees and the Courts determine whether a person can qualify to file under Chapter 7, or whether the filing would be abusive. Chapter 7 is a desirable chapter for filing because it provides the most relief available: most debts are discharged, payments […]
If it’s convenient to keep a home or bank account in joint names for estate planning purposes, the concept of bare legal title may protect that asset from being sold in bankruptcy. Bare legal title occurs when someone has a purely legal, but not equitable, ownership interest in an asset. If a person holds title […]
A disclosure statement is part of the Chapter 11 process, where businesses and individuals with sophisticated financial situations are trying to reorganize their affairs. A plan of reorganization is the document where the debtor describes how the creditors are going to be treated. A disclosure statement is a document that contains financial information regarding the […]
Generally speaking, I do not recommend filing chapter 7 cases for businesses. It is true that filing the chapter 7 case will stay any collection efforts and deliver most headaches of closing down a business to the trustee instead of to management. On the other hand, once the chapter 7 case is filed the trustee […]
If you have an account at a bank you owe money to that bank can seize your deposit funds and reduce your debt under the doctrine of “setoff”. This is because funds on account are not considered your cash, but rather a debt the bank owes you. Even after bankruptcy, the bank may freeze these […]
In every bankruptcy case, whether chapter 7, 11 or 13, you will have to meet with a trustee to discuss your finances and your bankruptcy papers. The trustee isn’t your enemy, but he or she does have the job of ensuring that your papers have information that is complete and accurate, and whether there are […]
The good news is that you do not marry into debt, so you will not be liable for these payments. On the other hand, if you are married filing jointly, the IRS may be able to offset your husband’s tax claim against any tax refund to which you may be entitled, so that would be […]
If you can keep your car payments current you will very likely be able to keep your car. In filing bankruptcy you will have to list all of your assets and all of your debts, so there is no discretion whether to put the car “in the bankruptcy”, but that’s just as well. The bankruptcy […]
No if you live in Maryland, Virginia, North Carolina, South Carolina or Western Virginia. Yes if you live in Florida, Georgia, or Alabama. The United States Supreme Court has ruled that undersecured loans (the loan payoff is higher than the value of the property) may not be stripped off in Chapter 7. As a result […]
Many debtors who find themselves in cash flow problems borrow from their 401(k), and then there are very rigid repayment obligations to these 401(k) loans. In fact, the Bankruptcy Code specifically says that 401(k) loan repayments are permitted and are to be deducted from your gross income to figure out what your net disposal income […]
