BANKRUPTCY

Bankruptcy is a proceeding in which a court administers the estate (the property and other assets) of a debtor for the benefit of creditors.

Bankruptcy law contains different groups referred to as “Chapters”. One Chapter in particular is a Chapter 7 Bankruptcy.

A Chapter 7 Bankruptcy may assist individuals, married couples, corporations and partnerships who are unable to pay their existing debts by discharging those debts. Once debts are discharged you will no longer be responsible for their payment.

The procedure starts with the filing in bankruptcy court of the official petition and a “Statement of Financial Affairs.” This statement contains extensive schedules requiring a detailed list of all your debts, including: all priority debts (including taxes); all “secured” debts (including home mortgages and auto loans) that have property as “collateral”; and all unsecured debts of any kind.

Other information that must be provided on the Statement of Financial Affairs includes: the names and addresses of the creditors; a list of all assets, including real estate and all forms of personal property.

It is extremely important that the Statement of Financial Affairs be completed accurately. Debts that are not listed in the statement will not be discharged at the completion of the bankruptcy proceeding. Failing to list assets in an attempt to hide them from creditors may result in serious consequences, including the denial of discharge or charges of bankruptcy fraud.

Under a Chapter 7 Bankruptcy a trustee (appointed by the court) determines if you have any assets which may be seized for the benefit of your creditors and takes possession of your property that is not considered “exempt.” Exempt property isn’t available to pay the claims of creditors and you can keep it. Federal statutes and state laws determine what property is considered exempt. Property will be claimed as exempt in the schedules that are filed to initiate the case. If no objections are filed to the exemptions, they become final 30 days after the meeting of creditors. The Kokolakis Law Firm, PLLC. will assist you by explaining what assets are exempt.

The Kokolakis Law Firm, PLLC. offers free telephone consultations for new clients considering bankruptcy who cannot get to our office or simply telephone our office to schedule a free office initial bankruptcy consultation. Legal fees depend upon the complexity of your case, and we offer flexible payment plans. Retain this office with no money down, and we’ll stop creditor harassment immediately.

Bankruptcy in general is a legal process designed to give individuals and businesses that cannot pay their bills a fresh financial start by eliminating all or, in some cases, repaying some of their debts. In many cases, bankruptcy offers instant relief by immediately stopping all of their creditors from seeking to collect debts. Generally, bankruptcies may be divided into two categories; liquidation and reorganization.

Liquidation bankruptcy is also known as Chapter 7 bankruptcy, which is usually used by individuals, but is also available to businesses whose expenses are greater than their income and cannot pay their debts. One of the main purposes of liquidation bankruptcy is to wipe out certain debt and provide a fresh start.

The court in a Chapter 7 bankruptcy will discharge unsecured debts that you owe, meaning you will not have to pay back your credit card, medical bills, payday loans, utility bills, civil court judgments, unless based on fraud, and other debt as well. However, it is possible that property that is not exempt may be sold and the money is used to pay your creditors. It is advisable that you meet with a bankruptcy attorney so that you may explain your rights and options as they pertain to you. Not all cases are the same and what works for one may not work for another.

The Criteria Of Qualification To File A Chapter 7 Bankruptcy

The main requirement for a Chapter 7 bankruptcy is that your expenses are greater than your income and you are not able to pay your debts. Determining this main factor is a bit more intricate in that you must qualify under the means test.

The means test is a test that was developed as a way to determine and make sure that people with too high an income are not taking advantage of the system. Basically, if your income is less than your state’s median, you qualify. If your income is higher than the state median, you must then complete more sections of the means test and can make certain deductions to try to get lower than the median.

In my experience, most people who think about filing Chapter 7 qualify under the means test but, of course, it is best to have that bankruptcy lawyer evaluate whether you qualify to discharge your debts to a Chapter 7 bankruptcy. In addition to the means test, you must complete a pre-bankruptcy credit counseling course and a debtor education course, which must be conducted by an approved agency. It is also important to know in order to qualify for a Chapter 7 bankruptcy we need to have at least eight years passed since the last time you filed if you filed for a Chapter 7 bankruptcy in the past.

What Kinds Of Debt Are Discharged In A Chapter 7 Bankruptcy?

The goal of the bankruptcy proceeding is to obtain a discharge of debts. A discharge in a Chapter 7 bankruptcy means the debtor is no longer legally required to pay any debts that are discharged and prevents the creditors from trying to collect from those debts. A discharge, however, is not automatic or guaranteed. In certain circumstances, the court can deny your discharge. For instance, your discharge may be denied if you engaged in fraud, did not list assets on purpose or lied under oath. The federal bankruptcy code lists the categories of debt that can and cannot be discharged.

Categories of debt that can be discharged in a Chapter 7 bankruptcy range from credit card charges, collection agency accounts, medical bills, personal loans from friends, family, employers, past due utility bills, deficiency balances, certain auto accident claims, business debts, student loans in rare circumstances to name a few. Categories of debt that cannot be discharged in Chapter 7 bankruptcy would be child support obligations, spousal support obligations, most student loans, except in very limited circumstances and recent tax debts.

Can Tax Debt Be Discharged In A Chapter 7 Bankruptcy?

Generally, recent tax debts are not dischargeable. However, certain aged income tax debts are dischargeable. Determining if income taxes may be discharged requires analysis. Income taxes that were due three years before you file for bankruptcy and at least two years have passed since you filed the appropriate tax forms and 240 days since the taxes were assessed may be dischargeable.

For more information on Chapter 7 Bankruptcy, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 444-1000 today.

Unlike a Chapter 7 bankruptcy, which is a liquidation bankruptcy, a Chapter 13 bankruptcy is a reorganization bankruptcy. To differentiate, in a Chapter 7 bankruptcy case, the assets of a debtor, if any, are sold by the appointed bankruptcy trustee to pay off the debtors, debts whereas in a Chapter 13 bankruptcy, the debtor instead of losing their property to sale, they are able to set up a payment plan with the bankruptcy trustee to pay back the debt over the course of a three to five year period. The money used to pay the bankruptcy trustee and satisfy the debt comes from regular income and waged instead of sale of proceeds of property like it does in a Chapter 7 bankruptcy.

The Criteria Of Qualification To File For A Chapter 13 Bankruptcy

Just as in a Chapter 7 bankruptcy, certain requirements must be met to qualify. These requirements, however, are not the same. In order to be eligible for a Chapter 13 bankruptcy, an individual, whether self-employed or operating as an unincorporated business, has to have enough disposable income to cover their debts. Chapter 13 requires that you pay off your debts with your stream of income. So, it is required that you show the court you have the capacity to meet your obligations solely from your income. Eligibility for Chapter 13 bankruptcy is also dependent upon the total amount of all your secured debts and unsecured debts.

What Kinds Of Debt Can And Cannot Be Discharged In A Chapter 13 Bankruptcy?

Secured debt is debt that is backed or secured by collateral. An example would be a mortgage on a house. When we borrow money to purchase a property we take out a mortgage. The mortgage serves to secure the mortgage loan. The house becomes collateral making the loan a secured loan. Basically, if we cease making payments, the lender may foreclose on the house, which is basically the lender claiming ownership of the house in lieu of the payment because we are not making the payments.

An unsecured debt and the most popular one are credit cards. Credit cards is a credit card company or a lending institution which gives you credit, allows you to utilize the card without asking for any security in return. So, if we stop making payments on a credit card debt, there is nothing that we put forward that they can turn around and grab as security to make good on the debt that we owe.

How Does Secured And Unsecured Debt Apply To A Chapter 13 Bankruptcy?

The Chapter 13 bankruptcy incorporates both the secured and the unsecured debt so we would examine the unsecured debt, which would be the credit card. We would still be able to wipe those out, maybe not completely liquidate them, but a percentage of that depending on the plan, depending on a case by case basis, depending on each individual. One of the primary purposes that one would file a Chapter 13 bankruptcy as opposed to a Chapter 7 bankruptcy is that they own a home and not only do they own a home, they own a home that has too much equity and what that means is that if this home were to be sold, there would be enough money left over after the lending institution was paid off in which to then apply and pay all the unsecured creditors.

Generally, if someone is in a rough situation and they need the protection of the bankruptcy law, but they do have a house and they do not want to risk the house, a Chapter 13 would be something they would want to entertain. But having a house does not necessarily mean that you would look at a Chapter 13. For example, if we had a home and this home had a value of $700,000, for example a fair market value and we owed $600,000 on that home, then based on New York State exemption, the house cannot be touched as it would be exempt, we will be able to file a Chapter 7 bankruptcy, we will be able to liquidate everything, but they would not be able to take the home and so we could discharge all the unsecured debt while saving our house.

For more information on Chapter 13 Bankruptcy, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 444-1000 today.

A Chapter 7 bankruptcy case may take anywhere from four to six months from when the petition is filed. How quickly the petition is filed depends on the results of our strategy session where we will discuss our client’s goals and analyze their financial affairs. Also taking into consideration how fast our clients are able to gather necessary documentation and information. Generally, a Chapter 7 case begins when the bankruptcy petition is scheduled to file with the bankruptcy court. Once the petition is filed, the court will schedule a 341 meeting of creditors, which is between thirty and forty-five days after the date in which we file the original petition.

This is something that our client will be required to attend. If all goes well and the meeting is not adjourned for a variety of reasons, then the meeting will be marked concluded and thereafter we can expect to receive the bankruptcy discharge about ninety days after the 341 meeting. As briefly discussed above with regard to the Chapter 13 bankruptcy, it will most likely last between three and five years and this depends on the length of the repayment plan. Usually when you complete your plan, you get your discharge soon thereafter.

Going back to the Chapter 7, we are looking at about four to six months from when we filed the petition. I emphasize on that part because many times, due to strategic reasons or other reasons, we may have a client and we may be working on their file for six months, sometimes even longer before we even file the petition. So, it is very hard to determine how long it takes from the moment they walk into our office, but once we are prepared and once we do file, then it makes it very easy to put us into a time frame of that four to six month period.

The General Impact Of Filing For Bankruptcy Upon A Person’s Life

Over my many years as a bankruptcy attorney, I have seen many people come to my office feeling like there was no hope, like they were drowning. In fact, many have felt ashamed or that they were doing something wrong. Many even believed that there was prison time involved. This stems back from other times, other parts of the world where when you owed money, yes, there is what was called a debtor’s prison, so I understand why many have this fear. Part of our strategy session consists of emotional counseling before we even start to discuss the financials and qualifications. This way, I can assure them, from an emotional aspect and give them a step by step process of what to expect moving forward and to help them feel comfortable of how there really is not anything wrong in being put in a situation where we need to file for a bankruptcy.

Not only have I experienced my clients improving their life, but I have witnessed time and time again, them looking at least ten years younger within weeks of obtaining their discharge. To this day, I never tire of hearing, “Thank you, John” with tears of joy. Recently, I was at a 341 meeting and I was dealing with an elderly client who was extremely nervous and almost could not even remember her own name and there was no reason for her to be nervous, it was a very straightforward, relatively simple Chapter 7 bankruptcy, but nevertheless it is not something she does on a daily basis, it is not something she has ever done before and she was really nervous.

Part of my job was to focus on her, calm her down before we sat before the trustee. I quietly escorted her out of the room, I walked around with her a little bit just really calming her down and reiterating, reviewing the petition, making sure she felt comfortable. During the 341 meeting, she was great. She answered perfectly, you would have never known that she were very nervous. Thereafter, she, as other clients have done before her, immediately upon concluding the 341 meeting and exiting the room let out a huge sigh of relief and a smile. I never tire of that sight.

For more information on Timeframe Of Discharge For Bankruptcy, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 444-1000 today.

When you file a bankruptcy petition, you trigger, among other things, an automatic stay. The automatic stay, found in Section 362 of the Bankruptcy Code, enjoins most collection and enforcement actions, like creditors, collection agencies or governmental agencies, against you, the debtor and your property. The automatic stay applies to all of the chapters of the Bankruptcy Code.

Is Bankruptcy Going To Rid Me Of All Of My Debt?

Generally, bankruptcy may get rid of most of your debts. Some debt, however, may not be dischargeable. Categories of debt that generally can be discharged under a Chapter 7 bankruptcy range from credit card charges, collection agency accounts, medical bills, personal loans from friends, family, employers, past due utility bills, deficiency balances, certain auto accident claims, business debts and student loans, in rare circumstances, to name a few. Categories of debt that generally cannot be discharged in a Chapter 7 bankruptcy are priority debts, such as child support obligations, spousal support obligations, most student loans, except in very limited circumstances, and recent tax debts. Secured debt, such as a loan for a vehicle or a mortgage, is typically not discharged through a bankruptcy and must be repaid if the property is not being surrendered

Is It True That Those Who File Chapter 7 May Lose Non-Exempt Assets In Exchange For Having Most Debts Erased?

A Chapter 7 bankruptcy case will generally discharge all of your debts while allowing you to keep your exempt assets. Nonexempt assets, however, are at risk of being taken by the trustee to be sold to pay off the debtor’s debts. This is why it’s important to have your specific case reviewed by a bankruptcy attorney before you file so you may ascertain the risks if any.

Which Bankruptcy Option Will Allow Me To Keep My Things?

The quick answer is: it depends. For instance, both a Chapter 7 and a Chapter 13 may permit you to keep your things. Another reason why it’s important to engage the services of an experienced bankruptcy attorney is so that the intricacies of each chapter may be explained with an eye towards how they will affect you.

Can I Choose Which Type Of Bankruptcy I’m Going To File?

Yes and no. You can choose which chapter is best for you, but there are some limitations. For example, you may be in a situation where your income is too high to qualify for a Chapter 7, and your only option may be a Chapter 13 bankruptcy. An experienced bankruptcy attorney can help you choose which chapter is best for you.

Is It True That To Be Eligible For A Chapter 13 You Must Not Exceed A Certain Level Of Debt?

True. You may not be able to file a Chapter 13 bankruptcy if your debts exceed a certain amount. An experienced bankruptcy attorney should explore the limits and carefully analyze your debts to determine if you qualify with an eye towards that kind of debt because not all debts count towards that limit.

The meeting of creditors is a meeting that is required by Section 341 of the Bankruptcy Code which is why it is also referred to as the 341 meeting. The bankruptcy code requires that every debtor personally attend a meeting of creditors and answer certain questions under oath. The questions are asked by the case Trustee who is appointed by the United States. The meeting is recorded, and the trustee will place you under oath and verify your identity and the accuracy of your bankruptcy petition and schedules. The main purpose of the questions are to help the Trustee determine if there are assets that could be liquidated for the benefit of your creditors. Your Creditors are permitted to appear at the 341 meeting. Although lately, they usually do not appear unless it is a complex case.

Does The 341 Meeting Take Place For All Types Of Bankruptcies?

Yes, the 341 meeting generally takes place for all types of bankruptcies.

If My Wife And I Are Both Filing For Bankruptcy, Do We Both Have To Be In Attendance?

Yes, if you are both filing, you both need to be there, no excuses. There are circumstances where you may have a husband and wife where only one of the spouses is filing, then both do not need to attend the meeting. In that situation, you may need to have the income of both on the petition, but only one needs to attend.

Are there classes that are required and are they Mandatory Classes that need to be taken Prior To The 341 Meeting?

Two courses are required by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). The credit counseling course is taken prior to filing your bankruptcy petition and the debtor edu­ca­tion course is taken after you file your peti­tion for bank­ruptcy and within 45 days after your first 341 meet­ing. They are both Mandatory.

Should Someone Be Nervous About The 341 Meeting Of Creditors?

Not at all. It is a very informal meeting, but yet it should be taken seriously. As long as you are prepared and answer the questions asked, all should be fine. Remember, your attorney should be present at this meeting at all times.

What is The 341 Meeting Like For Someone In Attendance?

The 341 meeting is an opportunity for the trustee to ask you a few questions to verify your petition. As I stated earlier, it is informal. You basically meet in a room, but you are not alone with the trustee. You can have the trustee there, and you will have your attorney there and maybe some other creditors, but in addition to that, all other filers for that day during that timeslot, will also be in the same room with you. So not only do they get to hear you answer the questions, and the questions being asked of you, but you actually have the opportunity to hear the trustee ask questions of other debtors who are in similar positions as you are, and you get to hear their answers as well.

How Long Does The 341 Meeting Of Creditors Generally Last?

The actual time that you are in front of the trustee can range anywhere from five to fifteen minutes depending on your situation. However, you may be there in that room for hours because there are many people in line, one after the other meeting with the trustee. So you need to allow a certain amount of time for your day, but the actual time in front of the trustee answering their questions is very minimal.

Does This Meeting Take Place In Front Of A Judge?

No, it actually takes place in front of the trustee.

Who Are The People Involved In Your Case That Will Be Present at The 341 Meeting?

The ones that are involved in our particular case would be the trustee, the actual debtor, and their spouse if they are filing jointly. You would have your attorney in this meeting as well. You may have actual creditors appear. For example, if you are filing a Chapter 7, and you have debt with American Express and Citibank credit cards, for example, they have the right to appear at the 341 creditors meeting and ask you questions if they so choose. But they generally do not.

How Can Someone Prepare For The 341 Meeting Of Creditors?

Review the petition and be aware of your answers. Bring your social security card with you and a picture ID. Ask any clarification questions that you may have of your attorney prior to the meeting. Show up early and listen to the questions as they are asked of other debtors.

For more information on 341 Meeting Of Creditors, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 444-1000 today.

General questions starting with your name, address, and the Trustee will ask a few questions based on your income, how much money that you make, and your general expenses. There may be some questions inquiring if you owe money to anyone else other than what is listed in the petition. You will be asked if you have reviewed the petition, and if that is your signature on the petition (as your signature is being presented to you). Sometimes you may also be asked how you arrived in this financial condition or situation. The Trustee may also ask about your taxes, do you owe any money on taxes, and have you paid all your taxes and if you have any tax refunds due to you.

Generally, all the questions asked of you, you should know the answers too. If there is a particular question where you may not understand the question, feel free to ask the trustee to rephrase. I always prefer that you ask for a rephrasing of a question if you are not sure. Make sure you are certain as opposed to thinking you know what they are asking, and then answering the question and having your answer potentially be an incorrect answer only because you did not understand the question in the first place. Sometimes you can also ask the attorney and your attorney will intervene if they pick up that clarification is required.

At What Point In The Bankruptcy Process Does The 341 Meeting Take Place?

The 341 creditor meeting takes place within forty-five days after you file your petition.

Where Is The Physical Location Of A 341 Meeting Of Creditors?

In the eastern district of New York. The US trustee holds the meetings either in Brooklyn or on Long Island.

Can Someone Speak To Their Attorney During The Questioning At The Meeting?

Generally, no. You need to answer the questions yourself. But there are situations where the attorney will intervene. It may be in a situation where the trustee may be asking questions that the attorney believes are inappropriate questions, or it may be as I stated earlier where clarification is needed. But generally, the questions should be directly answered by you.

Can I Request A Copy Of The Recording Taken At The 341 Meeting?

It depends. Generally, it is not needed and for the most part, it would be rare unless a particular issue arose where we needed to request the recording. In that event there is a process and a recording may be obtained.

What Is An Attorney’s Role At The 341 Meeting Of Creditors?

Questions asked by the Trustee should be answered by you. However, your attorney plays a vital role in that he may interject when needed to clarify something or call an issue to the trustee’s attention. Your attorney may and should stop the Trustee from asking any questions that are not appropriate at a 341 meeting. When the papers are properly prepared, and the client is prepped, then the role of the attorney is minimal, but the experienced attorney is always listening and on guard to make sure that the process runs smoothly.

Helpful Tips For Attending 341 Meeting Of Creditors

Try not to be nervous, I know easier said than done. But my number one piece of advice is try not to be nervous. Dress presentable, but do not overdress, be there at least one half hour early, and make sure to have your ID and social security card with you. Make sure to have reviewed your petition, and make sure to let the trustee ask their questions completely before replying. Keep your answers simple, mostly just answer no or yes, as applicable, and avoid getting into a narrative.

What Happens After The 341 Meeting Of Creditors Is Over?

Following a successful meeting where the trustee has no follow up questions and does not request any additional documents, your meeting will be closed. This is great in that you will not need to appear in another meeting or go to court. The timer is set. The trustee and/or any of your creditors have sixty days from the first date of 341 meeting to object to your bankruptcy discharge or the discharge of an individual debt. You will need to take the second course and file your financial management certification within forty-five days of your 341 meeting, or your bankruptcy discharge will not be issued. If all is well, within sixty-one to ninety days from the 341 meeting, you will receive a discharge.

What Are Some Common Mistakes Made At The 341 Meeting Of Creditors?

The number one mistake that I have witnessed is where the debtor’s answers do not match what was written on the petition. For example, the petition states the debtor does not own any real estate, and the attorney had completed it and now they ask, “Do you own any real estate”, and the debtor says, “Of course I do”, that becomes a problem, because now, what we have done is we have opened up the door, and the trustee is going to be drilling questions about the real estate and prior to that, the trustee did ask you if this was your petition, did you sign your petition, are there any changes you want to make to the petition, and the debtor usually has answered, “No” to any changes.

Sometimes you may have a situation where it is a surprise to the attorney because the client did not fully disclose everything. Sometimes it is a problem where the attorney, paralegal or someone at the office did not properly complete the petition, and review it with their client. So we do not know as a standing third party why that issue arose, but that can be a big problem.

For more information on Questions At 341 Meeting Of Creditors, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 444-1000 today.

The means test is a complex test used to determine if a debtor has too much money in which to qualify for a chapter 7 bankruptcy and presumed to be an abuse. In this instance, if determined that that the debtor has money to pay at least some of their creditors they may file a Chapter 13 bankruptcy as opposed to discharging all their debts under a Chapter 7 Bankruptcy.

Is The Means Test Only Required For A Chapter 7 Or For A Chapter 13 As Well?

Chapter 13 does not require a means test. However, you will still want to evaluate the Chapter 13 and how it will affect you. You may have too much income for your Chapter 7 bankruptcy, but not enough to comfortably make the payments under a Chapter 13 plan.

How Does The Means Test Work?

Basically, if your income is less than your state’s median, you qualify. If your income is higher than the state median, you must then complete more sections of the means test, and can make certain deductions to try to get the median lowered.

What Is Considered As Income?

Simply stated, we want the income to be lower than the state median. The means test compares the average of our last six months of income to median income in our state.

Is all my income included?

The average of our last six months are included, so we add our income to the last six months not including the month in which we are filing, and we divide that sum by six. If the total is less than the state median, then we have passed the means test and qualify for a Chapter 7 bankruptcy. When defining income, we should include the following sources:

• wages, salary, tips, bonuses, overtime, and commissions
• gross income from a business, profession, or a farm
• interest, dividends, and royalties
• rental and real property income
• regular child support or spousal support
• unemployment compensation
• pension and retirement income
• workers’ compensation
• annuity payments
• state disability insurance

We do not, however, need to include income from tax refunds, social security retirement or disability benefits or supplemental security income.

How Do Children Figure In The Means Test?

When comparing our income to the state median, we need to make sure we first determine the size of our household because state median income increases as the household size gets bigger. Our children count towards our household size permitting us to have a higher income, and still be under the state median income. In addressing our children, we must consider age and other factors such as where they live and if they are adopted.

What Expenses Are Allowed In The Means Test?

If your income is higher than the state median, you must then consider your expenses, and to try to get the median lowered. The permitted expenses are predetermined from what the IRS deems a normal amount, and not based on what you actually spend each month. Examples of permitted expenses are food, insurance, and security debts.

How Are Family Support Obligations Valued In The Means Test?

Family support obligations are taken into consideration as income or expenses. For example, if you are receiving alimony that is considered income whereas if you are paying alimony, then that is considered an expense.

For more information on Purpose Of The Means Test, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 444-1000 today.

If you are married and live with your spouse you must disclose your spouse’s income irrespective of whether he or she is filing or not. Thus, the means test considers your combined household income in determining if you qualify for Chapter 7 bankruptcy. The marital adjustment deduction is a certain set of deductions that your non-filing spouse can take as part of the Means Test. It is important in that it may reduce your spouse’s gross adjusted income which could help you qualify for Chapter 7 bankruptcy.

What About College, Tuition And Other School Expenses?

You may be able to deduct certain qualified educational expenses, but not for all dependent children under the age of eighteen. They may include amounts paid for tuition, fees and related expenses. Although not impossible, it is difficult to bankrupt your student loans?

Is Life Insurance A Deductible Expense?

Generally, you are able to deduct life insurance premiums on the means test. Some exceptions do apply.

Is There A Deduction For Helping A Family Member Out Financially?

Deductions are permitted for caring for a qualified relative provided they are not able to care for themselves, and they are reasonable deductions.

Is Someone Penalized For Not Using A Vehicle?

In terms of expenses, you are not penalized for not using the vehicle. You generally may deduct your transportation expenses such as taking the train or bus to get to and from work. If you do have a vehicle, then you can deduct the lease or finance payment.

What Should Someone Do After They Have Passed The Means Test?

Make a list of all your creditors, your expenses, and schedule an appointment with an experienced bankruptcy attorney to determine first and foremost if you qualify for a bankruptcy. If you qualify, then you should discuss the bankruptcy process before and after you file for bankruptcy and how it will affect you.

If Someone Fails A Means Test Should They Try To File For A Chapter 13 Instead?

Of course. Failing the means test does not disqualify you from filing a bankruptcy, but rather prevents you from discharging all your debts in the Chapter 7. Filing a Chapter 13 bankruptcy remains an open option.

For more information on Marital Deduction Adjustment, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (718) 444-1000 today.