by Shakeal Masoud, Attorney at Law
The goal of the means test is to prevent abuse of the bankruptcy process by individuals who can actually repay creditors through a Chapter 13 reorganization plan. There is a debate by bankruptcy attorneys nationwide as to why this has not worked. Nonetheless, the means test is a requirement to determine if a debtor qualifies for liquidation under Chapter 7 bankruptcy, or a reorganization of debts through a Chapter 13 plan.
The first part of the means test looks at the debtors income six months prior to filing the bankruptcy. If the debtor’s income is less than the state median income, they qualify for Chapter 7 bankruptcy.
If the debtor makes more than state’s median income than the second part of the means test is necessary to complete. If after deducting expenses, the debtors disposable income is high enough to pay unsecured creditors than the debtor can pay through a Chapter 13 reorganization plan.
If you have any questions regarding the means test contact an experienced bankruptcy lawyer at Sky Law Group today!
Tagged as:
Chapter 13 bankruptcy,
Chapter 7 bankruptcy,
Income,
Los Angeles Bankruptcy Lawyer,
Means Test,
Sky Law Group
by Shakeal Masoud, Attorney at Law
I often equate the automatic stay to a shield or force field around a debtor who has filed for bankruptcy. The automatic stay is an injunction which prevents or halts creditors from taking any further action against you. In essence, once the stay is in effect, creditors are stopped dead in their tracks from collection activities. Foreclosures are halted, repossessions, wage garnishments and lawsuits are also stopped. This is an extremely powerful tool for any individual who chooses to seek bankruptcy protection.
Collection agencies and bill collectors are well aware of the punishment for violating the stay. If a creditor has violated the stay than the debtor could get damages and attorney fees. If the debtor can prove the action of the debt collector was “willful” than the court can also award punitive damages. Punitive damages are damages which are intended to deter the defendant from engaging in similar conduct.
The next obvious question is how long does the protection from the automatic stay last. Often, the automatic stay lasts for the entire duration of a debtors bankruptcy. However, sometimes creditors who want to enforce their rights file for a “motion for relief of the automatic stay.” Typically, mortgage lenders file for such relief and enforce foreclosure proceedings once the stay is lifted. This assumes, however, that their is a legitimate reason for the foreclosure to continue. Many times, an attorney can successfully argue before the bankruptcy judge to keep the stay in effect. Depending on your unique situation it is imperative to have an experienced bankruptcy attorney enforce your rights and keep you protected under the automatic stay.
If you have any questions contact an experienced bankruptcy lawyer at Sky Law Group today!
Tagged as:
Automatic Stay,
Collections,
Foreclosure,
Injunction,
Repossession,
Sky Law Group,
Wage Garnishment
by Shakeal Masoud, Attorney at Law
Perhaps one of the most common questions asked in the past few months as credit card defaults have increased is whether filing a bankruptcy will stop a wage garnishment. In almost all situations, filing a bankruptcy WILL usually stop a wage garnishment. When a debtor files for bankruptcy, he or she is protected by the automatic stay.
I tell most clients that the automatic stay acts as a shield and creditors usually can’t penetrate that shield. When a bankruptcy is filed most of my clients benefit from the protection the automatic stay affords them. Thus, a creditor is forced to stop a wage garnishment except in limited situations such as child support payments.
Shakeal Masoud
California Bankruptcy Attorney
The goal of the means test is to prevent abuse of the bankruptcy process by individuals who can actually repay creditors through a Chapter 13 reorganization plan. There is a debate by bankruptcy attorneys nationwide as to why this has not worked. Nonetheless, the means test is a requirement to determine if a debtor qualifies for liquidation under Chapter 7 bankruptcy, or a reorganization of debts through a Chapter 13 plan.
