“Is Bankruptcy Right For Me?” – This is a question that is frequently asked by those who may be experiencing financial hardship or dealing with the burdens imposed by unmanageable debts.  To analyze this query we must first evaluate what bankruptcy is; which is to say we must consider both how the bankruptcy process works and the purpose that it serves.  With regard to the latter, bankruptcy is a legal process established under federal law that exists to provide relief to those who find themselves struggling with overwhelming debt. 

One of the primary element of any bankruptcy filing is something known as a means test.  It plays a pivotal role in determining a number of different things that all play a role in filing bankruptcy, including the chapter that may be filed, and in some cases, how long the bankruptcy itself will last.  The primary factor evaluated by the means test is income – specifically, income earned in the six months prior to filing.

Overwhelming or unmanageable debt can arise for a variety of reasons, and unfortunately, it can often arise due to a circumstance that can be difficult to predict or anticipate such as the loss of a job, the ending of a relationship or the occurrence of an unanticipated expense.  Bankruptcy can be an excellent resource to address such a situation, and is often one of the first solutions explored by anyone who finds themselves in such a circumstance.  However, for those who have already availed themselves of the bankruptcy process to deal with a similar situation previously, it is common to wonder whether bankruptcy can be pursued for a second time to deal with their current circumstances.  

A new year brings with it a sense of optimism, a concept of new beginnings that inspires positivity and hope for the year to come.  For many, it also represents the opportunity for a fresh start, a chance to free ourselves from the burdens that we might be carrying with us so that we can move forward into the coming year unencumbered.  Beyond the metaphorical implications of this idea, the New Year can also offer be the perfect time to free ourselves from the burdens imposed by unmanageable debt for any who might find themselves struggling with such a situation.  

When going through the bankruptcy process, it is very common to receive something known as a “reaffirmation agreement” from a lender.  Generally, these agreements will be sent out by lenders with whom you have a secured loan, such as a mortgage, a car loan, or a home equity line of credit.  These agreements are essentially written requests for a debt to be excluded from the bankruptcy discharge.  Should you choose to sign a reaffirmation agreement, it would filed with the court after its completion, and a judge would then determine whether the debt in question should be reaffirmed and excluded from discharge. 

One of the most common forms of bankruptcy that people often pursue is referred to as a “Chapter 13”.  Fundamentally, a Chapter 13 bankruptcy is a three to five year plan wherein you make payments to someone known as the bankruptcy trustee (the federally appointed official responsible for overseeing your bankruptcy).  The idea is that these payments will typically pay down a portion of what you owe, and then at the end of your chapter 13 plan you will receive a bankruptcy discharge which will eliminate any remaining obligation that you have towards the debts being resolved through the bankruptcy.

Bankruptcy can offer financial relief in a variety of different ways, and related to this, there are a number of different chapters of bankruptcy that you can file under which will offer different benefits with regard to your financial circumstances.  Regardless of which chapter of bankruptcy that you file, you will always attend something called a “First Meeting of Creditors” which is also commonly referred to as a “341 hearing”.  Upon hearing the term, you might naturally wonder what this meeting entails, as well as who will be in attendance and what format the meeting will occur in.  This blog will explore these topics and serve as a brief guide to navigating the process of preparing for and attending a first meeting of creditors.

When contemplating the possibility of bankruptcy, many often wonder how this process begins and what the necessary steps to move forward with it might be.  Curiosity on this point is very understandable, as bankruptcy can be a completely new experience, and we naturally want to know more about how a journey begins before we embark on it.  This blog will provide context on the opening phases of the bankruptcy process, and will guide you through the steps necessary to begin them.

One of the first things that many people consider when contemplating a bankruptcy is the effect the filing will have on any vehicles that may be co-owned by their children, or registered in the parent’s name on the child’s behalf.  There are many reasons that we might find ourselves co-signing on a vehicle for our children.  Often, a child may still be a minor when a vehicle is purchased preventing them from registering it in their own name on the title.  Conversely, a parent may also co-sign on a vehicle for one of their adult children for the purpose of assisting with the financing process. Regardless of the reason however, the ultimate result is that the parent will be included on the title to the vehicle, and if applicable, will be co-signed on any loans taken out to finance it.

Receiving a notice or a demand from a debt collector can be jarring.  You might wonder who they are, or why they are contacting you.  In many circumstances it can be difficult to tell why they are reaching out or even who they might be collecting on behalf of, especially if the debt they are be pursuing is old or traces from a closed account.  The good news in this circumstances is twofold.  First, that you always have the right to demand that a debt collector verify what debt they are trying to collect on, and second, that in most circumstances, bankruptcy can be a tool to help you deal with their ongoing efforts to collect from you!  

When filing bankruptcy, it is common to wonder which creditors will be included in the filing.  Related to this, it is also very common to wonder how various loans will be treated or resolved.  In certain circumstances there may be a specific creditor that you do not wish to discharge a debt with.  Similarly, there may be a specific loan, such as a mortgage, car loan or retirement account loan that you do not wish to discharge either.  One of the many benefits of the bankruptcy process is that it does not require you to treat all debts in exactly the same way; herein we shall examine a few of the ways in which this principle is observed.  

When filing a Chapter 13 Bankruptcy, many often wonder how payments are calculated and to what extent their financial means will be considered in the process of determining that payment.  Fundamentally, payments are calculated according to two principles: the best interests test, (also referred to as the BIT) and the best efforts test.    

Something that many people wonder when they file bankruptcy is how the filing will effect a car loan that exists at the time that the bankruptcy is filed.  It is a natural question, and one that is highly important in the context of ensuring that you are able to keep your vehicle after the bankruptcy is filed.  Ultimately, the treatment of the car loan will depend on the chapter of bankruptcy that you file, but in most circumstances you will be able to retain the vehicle and continue to make payments on the related loan.  

Any time that someone is contemplating on whether they will need to hire an attorney to assist with a legal matter, one of the first things that they will consider is how to determine who to work with.  This is as true in bankruptcy as it is in any other area of the law; ultimately, the attorney and the law firm that you work with are going to play a critically important role in the way that your case is handled.  To that end, there are a few things that you may wish to consider when deciding who to hire.

A common question that many people ask when filing bankruptcy is how the bankruptcy will affect any co-signers that they may have at the time of filing.  Depending on the circumstances, the impact will differ.  If, for example, two spouses are both filing bankruptcy together and they are co-signed on a number of shared debts, then the fact that they are co-signers with one another will not have a significant impact on the bankruptcy.  Alternatively, if you are filing bankruptcy and have a co-signer who is not also filing, the impact on the co-signer will be different than it would for two spouses filing jointly.   

When filing bankruptcy, one of the first things that many people will ask is whether they will need to make an appearance in court related to the filing.