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
The means test is one of the new requirements under BAPCPA for an individual filing bankruptcy. The intent of the means test is to prevent abuse of the bankruptcy system. The means test is determined based on an individuals income and expenses. If a debtor does not qualify under the means test for a Chapter 7 bankruptcy filing, than most debtors typically file a Chapter 13 bankruptcy. Debtors might be aware of the means test, but very few understand what exactly is involved with each step.
We will discuss the means test, step by step, in our upcoming posts so you get a better understanding of the mechanics behind the test.
If you have questions regarding the means test, contact an experienced Los Angeles bankruptcy lawyer at Sky Law Group today!
Tagged as:
Bankruptcy,
Chapter 13 bankruptcy,
Chapter 7 bankruptcy,
Los Angeles Bankruptcy Lawyer,
Means Test,
Sky Law Group
by Shakeal Masoud, Attorney at Law
Often times prospective clients ask if the judge will approve their case or whether the judge will allow their case to go through without any problems. The reality is that most debtors who file bankruptcy never see the bankruptcy judge.
For Chapter 7 clients, the only appearance is the 341a meeting of creditors which is in front of a bankruptcy trustee, not a judge. Thus, the majority of Chapter 7 bankruptcy clients never see the bankruptcy judge.
For most Chapter 13 clients, they only see the trustee at the 341a meeting of creditors and rarely have to attend the confirmation hearing, where the bankruptcy judge is present. The trustees powers are limited and only the bankruptcy judge can make the ultimate decision regarding your individual case. However, the trustee can file a motion to dismiss your case and makes recommendations as to why your case should or should not go through.
Each bankruptcy case is unique so its important to have an experienced bankruptcy attorney file your case. If you have any questions regarding your Chapter 7 or Chapter 13 bankruptcy, contact an experienced Los Angeles bankruptcy attorney at Sky Law Group today!
Tagged as:
Bankruptcy Judge,
Bankruptcy Trustee,
Chapter 13 bankruptcy,
Chapter 7 bankruptcy,
Los Angeles Bankruptcy Attorney,
Sky Law Group
by Shakeal Masoud, Attorney at Law
How long before i can file Chapter 7 bankruptcy again? This has been a very common question this week. If you have filed a Chapter 7 bankruptcy and got your discharge, you must wait 8 years before filing for another Chapter 7 bankruptcy. On the other hand, if you have filed for Chapter 7 bankruptcy and have obtained a discharge and need to file a Chapter 13 bankruptcy you must wait 4 years from the date you filed Chapter 7 bankruptcy.
Many times, I counsel clients and give them financial strategies to implement to prevent another bankruptcy filing. The entire goal of bankruptcy is to give the debtor a fresh clean start to rebuild their credit and their finances. If you have been an avid reader of our posts you will know that such goals require planning and implementation. It won’t happen on its own. Planning is an important part of financial empowerment. Being proactive about your finances, as opposed to reactive, is imperative.
So, if you have filed bankruptcy in the past and meet the time line requirements above, you do have bankruptcy as an option. But, planning correctly and outlining your goals can prevent a bankruptcy in the future.
If you have questions or concerns regarding your Chapter 7 or Chapter 13 bankruptcy, contact an experienced Los Angeles bankruptcy lawyer at Sky Law Group today!
Tagged as:
Chapter 13 bankruptcy,
Chapter 7 bankruptcy,
Discharge,
Los Angeles Bankruptcy Lawyer,
Refile,
Sky Law Group
by Shakeal Masoud, Attorney at Law
Many people mistakenly believe that income taxes can not be discharged in a bankruptcy. But the bankruptcy code allows a debtor to eliminate his or her income tax debts if the requisite elements have been satisfied.
1) There must not be willful evasion or fraud.
2) Tax debt must be at least three years old.
3) Tax return was filed at least two years prior to your bankruptcy filing.
4) The tax debt must not have been assessed within 240 days prior to your bankruptcy filing.
By meeting these requirements, you are able to discharge your income tax obligations and the IRS will not be able to freeze your bank accounts or garnish your wages. However, keep in mind that a bankruptcy will not eliminate a federal tax lien once it has attached to your assets.
Depending on your unique situation, a Chapter 7 bankruptcy or a Chapter 13 bankruptcy can be used to discharge your income taxes.
Consult with an experienced Chapter 7 or Chapter 13 Los Angeles bankruptcy lawyer at Sky Law Group today!
Tagged as:
Chapter 13 bankruptcy,
Chapter 7 bankruptcy,
Income Taxes,
IRS,
Los Angeles Bankruptcy Lawyer,
Sky Law Group
by Shakeal Masoud, Attorney at Law
In our last article we discussed the enormous pitfalls of student loan debt and how prevalent such debt is in our society. We also briefly discussed the three prong test, known as the Brunner Test, used by courts in California to determine whether a debtor is able to discharge his or her student loans. The Brunner Test is a three prong test and each element must be met in order for student loan debt to be considered an “undue hardship.”
(1) The debtor can not maintain a “minimal standard” of living, based on his income and expenses, for himself and his dependents if forced to repay the loan.
(2) Additional circumstances exist indicating that your current state of affairs is likely to continue for a significant part of your repayment period.
(3) Debtor must have made a good faith effort to repay the loan.
As stated, your chances of proving all three elements are probably slim. Again, it’s important to understand that all three elements of the test must be satisfied. Understandably, for most debtors the second element is a difficult one to meet. Although you may be facing immediate difficulty in your financial situation you must demonstrate to the court that such difficulty would continue for the foreseeable future. However, if you have a permanent disability and have tried to repay your loans you have a better chance.
Thus, by applying the strict elements of the Brunner Test most debtors will not be able to eliminate student loan debt with a Chapter 7 or Chapter 13 bankruptcy.
If you have questions regarding your student loan debt contact an experienced Los Angeles bankruptcy lawyer at Sky Law Group today!
Tagged as:
Brunner Test,
Chapter 13 bankruptcy,
Chapter 7 bankruptcy,
Los Angeles Bankruptcy Lawyer,
Student Loans,
Undue Hardship
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.
