Archive for March, 2016

Bankruptcy Simplified

Bankruptcy gives you alternatives that are legal and moral . Chapter 7 and Chapter 13, and various options under each one.    

What is Bankruptcy?

Bankruptcy is a legal option for dealing with your debts. It enables you to face your financial life in an honest and realistic way. It allows you to put past problems and mistakes behind you, focus your energies on the present, and set goals for the future. Bankruptcy is a personal choice that may be right for you or may not. But if you are financially struggling, it’s wise to find out about it.


The Size of Your Family for the “Means Test”

Use the correct size of your family to qualify under Chapter 7. That’s not as simple as you might think. Our last blog post last week was about which state to use for the “means test” when you have connections to more than one state. The way you answer that question can be crucial for passing the “means test” and qualifying for Chapter 7 “straight bankruptcy.” Same thing with the size of your family, as today’s blog post explains.

The Easiest Way to Pass the “Means Test”

As we’ve been saying, the easiest way to pass the ‘means test’ with…

Is Utah the Right State to Use for the “Means Test”?

You must use the right state in qualifying for Chapter 7. What if you’ve moved recently or your life straddles between two states?

  Our last blog post a couple days ago was about the unique definition for “income” as used in the “means test.” Understanding this definition and applying it to your advantage can be crucial for passing the “means test” and qualifying for Chapter 7 “straight bankruptcy.” (See that most recent blog post to calculate your own annual “income” amount.)

As we said, the “easiest way to pass the ‘means test’ is for your family ‘income’ to…

The Special Meaning of “Income” for the “Means Test”

“Income” for the “means test” includes more than you’d think, but looks only at the 6 full calendar months before your bankruptcy filing.

Our last blog post a couple days ago was about an upcoming cost of living adjustment of median family income amounts. This adjustment is going in effect for bankruptcy cases filed on and after April 1, 2016. (See Section 101(39A) of the Bankruptcy Code.) These median family income amounts are important because they can determine whether you can pass the “means test” and qualify for a Chapter 7 “straight bankruptcy” instead of a Chapter 13 “adjustment…

Utah’s New Median Income Amounts

The new median income amounts apply to Chapter 7 and Chapter 13 bankruptcy cases filed on or after April 1, 2016.

  Last week we finished a series of about a dozen blog posts related to an every-3-year cost of living adjustment of many of the dollar amounts that are within the bankruptcy statutes. Because inflation during the last few years has been relatively low, these dollar amount increases were modest. (See this notice in the Federal Register.) But they are still important because on the margins they can affect everything from whether you can qualify for bankruptcy, what…

The Military Exceptions to the “Means Test”

Qualify for Chapter 7 by avoiding the “means test” if you fit within these focused military exceptions.   

Short Introduction to the “Means Test”

The “means test” determines whether you have enough income after your expenses to pay a meaningful amount back to your creditors. If you do, you don’t pass the “means test” and you don’t qualify for Chapter 7 “straight bankruptcy.” But like many people who want to file a Chapter 7 case, you may easily pass this test simply by having low enough income. As long as your income is no more than the current published “median

Skip the Chapter 7 “Means Test” with Business Debts

If the amount of your business debts exceeds your consumer debts, avoid the “means test” and more easily qualify for Chapter 7 bankruptcy.   Last week we had a blog post about an adjustment in the “means test” that is used for qualifying for Chapter 7 “straight bankruptcy. We mentioned that you’re exempt from needing to take and pass the “means test” under two circumstances:
  • if your debts are primarily business debts instead of consumer debts
  • if you fall into one of several military service categories
We’ll cover the first of these exemptions today, and the second one in our next…

More Back Wages Now More Likely to Be Paid

The amount of back wages and/or benefits owed to you that is treated as a “priority” debt in your employer’s bankruptcy is increasing.  

This is the last of a series of blog posts on the effect of changes going into effect on April 1, 2016. These changes are a result of a cost of living adjustment that’s in the federal bankruptcy law. See Section 104(b) of the Bankruptcy Code.

Every one of these blog posts so far have been about these changes would affect you if you were filing a Chapter 7 “straight bankruptcy” or a Chapter 13 “adjustment…

Shorter Chapter 13 Cases for Larger Families

Soon families in Utah with more than 4 people can have slightly more income and still finish their Chapter 13 cases in 3 years instead of a 5.  

How could it be that larger families can have shorter Chapter 13 “adjustment of debts” cases?

The reason is that on April 1, 2016—as happens every 3 years—there will be a modest increase in the “median family income” calculation for “a debtor in a household exceeding 4 individuals.” This matters because whether your Chapter 13 case can last 3 years or instead must go for 5 years depends whether your “current monthly…

An Increase in the Chapter 13 Debt Limits

You can’t get the benefits of Chapter 13 if you owe too much. But as of April 1, 2016 those debt limits are going up.  

Why Debt Limits in Chapter 13?

You can have an unlimited amount of debt when you file a Chapter 7 “straight bankruptcy.” However, there are debt limits when filing a Chapter 13 “adjustment of debts for an individual with regular income.” How come the difference?

Chapter 7 is relatively straightforward, and in most consumer cases is done in only 3 or 4 months. There is a quick determination whether everything the debtor owns is “exempt”—protected…