In Chapter 7 bankruptcy, a debtor needs to complete a form that discloses all income and authorizes certain expense deductions to determine if the person qualifies for Chapter 7. This is called the means test. The income includes wages, interest, dividends and, if applicable, alimony and child support the debtor receives. If after adding this […]
In the absence of a good defense, a person who signs a document will be bound by its terms. This is true even if the person felt they didn’t have the time to read the document or didn’t understand what the document meant. Defenses include, duress, fraud and mutual mistake, although these defenses seldom succeed […]
The rules concerning the venue of where a debtor can file a bankruptcy case offer a variety of choices. A person or entity seeking bankruptcy may file a case where they: Live Intend to live permanently Work Have most of their property Have a related person or entity that has already filed for bankruptcy An excellent example of […]
The answer to this question depends on if you have equity in your home and if you’re behind in your mortgage. If there is no equity in your home, which means that the amount that you owe on the mortgage is more than the house is worth, and you are current on that mortgage, you’re […]
Chapter 7 relief is not necessarily denied to a debtor just because their income is above the median income for their state. Such debtors may still qualify for Chapter 7 relief, but they will have to complete the seven page long form instead of completing the one page short form. The long form contains a […]
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 […]
Information about a debtor is available from many different sources. Many states now have all lawsuits, business history and propery ownership records available online. The debtor itself is required to file Schedules and Statement of Financial Affairs at the beginning of a bankruptcy case. These are documents signed under oath that contain important information about […]
An involuntary bankruptcy occurs when three or more creditors join together to force a debtor into bankruptcy court jurisdiction. These involuntary petitions usually occur when the debtor has acted in a way that causes creditors concern that the debtor’s assets and value are rapidly depreciation, or has recently dropped. This may happen when, for example, […]
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 […]
