In October of 2005, sweeping changes were made to the bankruptcy system in an effort to tighten the requirements for an individual to file for bankruptcy and to stop increasing abuse of the system. As a result, legitimate filers, those unfortunates forced into this position, will have a more difficult time discharging debt under a Chapter 7 bankruptcy. lawyers in Duluth who practice bankruptcy are here to help you understand and deal with the changes to the law. But, here is a quick list that will make your first meeting easier and give you an idea if a Chapter 7 filing is the solution to your situation.
• Calculate your average current monthly income over the last six months.
• If the average is below or equal to the median income for your state, you are eligible to file Chapter 7.
• If you are a disabled veteran and your debts were incurred during active duty, you may file Chapter 7.
• If your average monthly income is above the state median income, you must first pass the “means test” to figure out if you will have enough disposable income after certain expenses are subtracted to repay some of your debts over a 5-year period.
• If you have filed Chapter 7 in the past 8 years or Chapter 13 in the last 6 years, you cannot file Chapter 7.
• You cannot file Chapter 7 if, in the last 180 days, either a Chapter 7 or Chapter 13 filing was dismissed because you :
o Requested a dismissal
o Committed fraud in your filing
o Violated a court order

• A Chapter 7 filing will run about $274 and take about 4 to 6 months until debts are discharged. Charges may vary between individual attorney’s offices, so contact your lawyers in Duluth who practice bankruptcy for a complete quote.
• Prior to filing, mandatory credit counseling must be completed with an approved agency.
• A bankruptcy trustee is assigned to each case. This trustee has control over all assets and debts.
• A creditor’s meeting, planned by the trustee, gives creditors a chance to question the debtor as to the condition of collateral for secured debts. Duluth bankruptcy lawyers will accompany you to this meeting.
• The trustee’s staff will decide if any assets should be nonexempt. Those assets must be surrendered or sold, the proceeds going to creditors.
• Once all conditions of the bankruptcy are met, the debtor must attend mandatory budget planning with a government approved agency.
• When all counseling is complete, all remaining debts are discharged. At this time, the debtor is no longer legally responsible for those debts.
• A Chapter 7 bankruptcy will stay on credit reports for 7 years, affecting credit, interest rates, insurability, and sometimes employment.

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This entry was posted on Tuesday, March 31st, 2009 at 2:26 am and is filed under Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.