Tag Archives: DebtReduction

Bankruptcy Fact or Fiction

How much do we know about bankruptcy? We see television commercials and hear about famous people that have filed from the tabloids and it’s just human nature to make assumptions made when it comes to bankruptcy that just are not true. Cause Many people have never experienced severe financial hardship. Many believe that individuals who file for bankruptcy are just irresponsible when it comes to managing their money. This is not true. Many bankruptcies are a result of medical costs such as an unforeseen long-term illness that can have a devastating effect of a family’s finances. Other times individuals may be overwhelmed with legal costs associated with divorce or a wrongful conviction. Many times bankruptcy is just a result of an individual experiencing an unforeseen event in their life. Effect Think bankruptcy will remove any and all debts? Not so fast. If you have past child support payments before the…
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Understanding the Chapter 7 Means Test

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) introduced the bankruptcy means test. The means test is required for individual debtors with primarily consumer debts who file under any bankruptcy chapter, but Chapter 7 bankruptcy in particular requires an individual to “pass” the means test. The Chapter 7 means test is intended to prevent people with a certain amount of disposable income (even as little as $150 per month) from discharging a large portion of their debt. The bankruptcy means test is not always a cut and dried matter. Bankruptcy courts around the country – as well as the U.S. Supreme Court – have ruled on means test issues. Because the means test is a complicated aspect of bankruptcy law, and because you must pass the Chapter 7 means test in order to be eligible for a Chapter 7 discharge, it is important that you let a…
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The Morality of Filing Bankruptcy

As a practicing bankruptcy attorney for over 25 years, I have talked to thousands of people about the pros and cons of filing bankruptcy. One of the most frequent reasons cited against filing by potential clients is the “morality” question. I often hear comments such as: “I wasn’t raised that way,” or “I am a very religious person and it isn’t the moral thing to do,” or “I have always paid my bills, can’t we negotiate a payment plan?” Dealing with potential clients’ feelings of a moral lapse or inadequacy is not easy. The fact is that no matter what I tell some folks with these concerns, they will always feel that filing bankruptcy is a moral failure on their part. These feelings are sometimes reinforced by what they hear in the media, from neighbors or acquaintances and sometimes even from the pulpit. While I try not to disagree with…
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