Prior to the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), the bankruptcy Means Test did not exist.  The purpose of the Means Test was to help prevent bankruptcy fraud by preventing individuals with higher income levels from filing a Chapter 7 bankruptcy to discharge their unsecured debts.  Creditors lobbied congress to pass the Means Test as a way to require individuals who DO have disposable income to pay back some of their debts in a Chapter 13 case instead of filing for a Chapter 7. Requiring those with disposable income to pay back  a portion of their debts in a Chapter 13 case provides a safeguard for creditors and reduces bankruptcy fraud.

If you research bankruptcy online, you will find some useful information but you will also find a great deal of misinformation. Unfortunately, this misinformation can create doubt, confusion, and fear for a person who is already suffering the stress of dealing with debt problems. You may believe that the bankruptcy timeline is long and complicated; however, our staff is here to help you through each step in the bankruptcy timeline so that you can put the stress and anxiety of debt problems behind you in less time than you think.

Bankruptcy is and has always been intended as a way for people who are struggling with debt to resolve their debt problems and receive the relief they need to rebuild their lives. In order to help people and businesses overcome debt problems, Congress enacted bankruptcy laws to provide a legal means of handling debt. It divided bankruptcies into six different chapters. Each bankruptcy chapter has its own set of requirements for eligibility as well as its own advantages and disadvantages for the debtors. Knowing what chapter of Minnesota bankruptcies to file is something that an experienced bankruptcy attorney can help you determine based upon your unique financial situation and your long-term financial goals.

In today’s world, it is very common to be asked to provide a co-signer when seeking a loan, apartment, or other form of credit from a bank or company. It is their way of assuring themselves that they will get paid. You may think that they require this because they don’t trust people to make their payments, but in reality, they too know that bad things can happen to good people. Things in life may happen that are not under control of the debtor such as unemployment, divorce, death of a spouse or a prolonged illness. When these events happen, the duties of a co-signer may become a reality.

Filing bankruptcy is an important decision; it can be the first step in resolving your debt problems so that you can focus on recovering and rebuilding your finances. We understand that you may feel nervous about meeting with an attorney to discuss bankruptcy options. We also understand that you may have doubts about whether bankruptcy is right for you, especially if you are considering a Chapter 7 bankruptcy case.

Getting out of debt is a top priority for many Americans today. Debt is a huge problem in our country and is causing many people to struggle financially. Debtors depend on a number of different solutions to help them get out of debt; some rely on the bankruptcy court while others are able to make changes to their budgets, get second jobs or refinance their debts.

Some people may believe that they are eligible for bankruptcy regardless of their current financial status — they are partially correct. Others believe that the changes in bankruptcy law that came with the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 made it impossible for most people to find debt relief through bankruptcy — they, on the other hand, are completely wrong. While changes in the bankruptcy laws did restrict some of the eligibility requirements, it did not remove the right of any individuals to seek relief from creditors through the protections offered in bankruptcy.

The Eligibility Confusion

The confusion can be summed up in two words: media and creditors. Creditors, with the help of media outlets, did a fantastic job of convincing most Americans that if they did not file bankruptcy before October 2005 when the new bankruptcy laws took effect, they would not be able to file bankruptcy (or that filing bankruptcy would be much more difficult).

While it is true that the new bankruptcy laws did contain some significant changes, experienced bankruptcy attorneys had already learned the new rules and laws and were ready to continue helping debtors find debt relief through bankruptcy.

Sometimes, the best way to understand that you are not alone in your financial distress and the emotional despair that comes with it is to share a story of someone who has been in your shoes. So I’ve asked Patrick* if he was willing to share his story with you. He isn’t the stereotypical candidate for bankruptcy – in fact, most filers don’t fit that mold – and his journey is representative of many that come through our doors.

Meet Patrick

My story may sound familiar to you if you are dealing with overwhelming debt. My name is Patrick. My wife and I were both successful in our careers and blessed to have a good income to support our children and our lifestyle. This was until I was laid off from my job two years ago. I qualified for unemployment and we managed to make ends meet by cutting expenses and making lifestyle changes. Unfortunately, my unemployment ran out before I was able to find another job. My wife and I both assumed that I would be able to find another job within a short period of time; however, due to the recession and the economy, jobs within my industry were difficult to come by.

After my unemployment ended, we were unable to keep up with our living expenses, in addition to our other monthly bills. Of course, we tried to keep our mortgage and car payments current because they were necessary for our survival. We did not pay our credit cards, personal loans and medical bills in favor of paying our house payment, car payments and living expenses. We managed to hang on for several month months but eventually one of our vehicles was repossessed. Creditors and collection agencies would call at all hours of the day and night, they even began calling my wife at work and threatening to file lawsuits. We received notice that we owed a deficiency on our car loan and they would be seeking a judgment to force us to pay the amount due. It seemed that the more we tried to settle with creditors, the more aggressive and demanding they became.