| Can You File For Chapter 7 Bankruptcy (bankruptcy)
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Can You File For Chapter 7 Bankruptcy
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Save Money on Your Mortgage Refinance After Bankruptcy
When it comes to applying for a loan, who doesn't want to save money? But if you are refinancing a New Hampshire mortgage after bankruptcy, this could be easier said than done. To help you out, here are three sure-fire ways to save money on a post-bankruptcy mortgage refinance:
Prepare for the Refinance
Borrowers pay an average of $2,734 to close on a mortgage loan in New Hampshire... Read bankruptcy article
Bankruptcy Help
What is bankruptcy?
Bankruptcy is one way of dealing with debts you cannot pay. The bankruptcy proceedings will free you from overwhelming debts so you can make a fresh start, subject to some restrictions; and make sure your assets are shared out fairly among your creditors. Anyone can go bankrupt, including individual members of a partnership.
How are you made bankrupt?
... Read bankruptcy article
Can You File For Chapter 7 Bankruptcy
Most people file for Chapter 7 bankruptcy because of the three main reasons:
1. It is much faster then the other Chapters. With a little effort on your side, you can have the entire process over in next four to six months.
2. It is also simpler to file. No frequent visits to court are required.
3. There are no after payments. Once your bankruptcy is discharged that is it, you are debt free. (Under the 2005 bankruptcy law, not all debts can be discharged anymore so consult with your attorney before filling).
On the other hand, Chapter 7 has a catch, the court will decide whether you are allowed to file for it or not. One of the main reasons why you can be denied to file for Chapter 7 is your income. If it happens to be sufficient to payoff some of your debts (after your allowed living expenses have been counted in) then you might be forced to file under Chapter 13 bankruptcy law.
How to check if you can apply?
First thing you need to do is to calculate your average earnings in the last 6 months and compare it with average income for the state you live in. You will be allowed to file under Chapter 7 if your income happens to be lover or the same as the median income of the state you live in.
In case that your average income is higher than that, and you still want to apply for Chapter 7 bankruptcy you will have to go through one more test called the Means Test.
So what is a means test?
It is a test based on the results calculated for your allowed living expenses.
How to calculate my living expenses and what can I include in it?
It is actually quite easy to calculate it. Take all your income from one average month and deduct the following allowed expenses:
1) Utility bills, transport (gas), food, clothing. (Make sure to use IRS amounts for these or the court will not take it in to account).
2) Your secured monthly payments like child support, car loan, mortgage and tax.
After you finish with the calculation and your average disposable income per month is lover then $100, you have passed the means test and you stand a fair chance of being approved to file for bankruptcy under Chapter 7.
If on the other hand your disposable income happens to be more than that (figure most often mentioned is $166, but it can vary), you will most likely have to file under Chapter 13 of the bankruptcy law. That is unless you can provide evidence that there are some special considerations to be taken in your account.
For any figures between $100 and $166, it is best to consult with your attorney. Make sure to find an attorney that specialize in bankruptcy and credit repair and has the solid reputation.
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Chapter 7 Bankruptcy
In the recent years, bankruptcy has become the only way out for many people suffering unbearable debts. According to the US law, a business, partnership, a corporation or an individual like you and me, can seek relief from debt under Chapter 7 of the bankruptcy law.
Last year on October 17, 2005, a new bankruptcy law was passed and a means test was introduced. It determines whether you are eligible or not to file under Chapter 7. The point behind the means test is to determine whether you have enough money left to pay back some of the money you owe to your creditors or not, after all your allowed living expenses are taken in to account. It is calculated by subtracting an IRS allowed living expenses from your monthly income.
If your income after the calculation shows to be lower or equal to the median income of the state you live in, you will most probably be allowed to file under Chapter 7.
However, if your income happens to be larger then median income of the state you live in then your average income for the past six months will be taken in the consideration, or might be forced to file under Chapter 13 of the bankruptcy law.
Some of the expenses taken in the consideration are:
1. Utilities
2. Food
3. Clothing
4. Gas and transportation bills
5.Mortgage loan
6. Car loan
7. Child support
8. Taxes
If on the other hand after subtracting all of these expenses, you have at least $6000 left over to pay back to your creditors (the unsecured ones) in the next 5 years you will be forced to file for Chapter 13 instead.
Also under the 2005 bankruptcy law, you will need to file all your overdue tax returns if you want to apply for Chapter 7.
In case that during the 180 days of proceedings your application happens to be dismissed because of the willful failure on your side to comply with the court orders you will be denied filing for bankruptcy under Chapter 7.
Also in case that you as an debtor have dismissed the previous case of your own free will, after your creditors have required relief through the bankruptcy court, your petition will also be denied.
2005 bankruptcy law has brought along one more important change, as an individual you are now obliged to obtain credit counseling from a certified counselor before you can file for Chapter 7 bankruptcy.
The purpose of credit counseling is to educate you and help you reorganize your financial affairs. If you are serious about filing for Chapter 7, you have to provide the court with debt management plan you have developed during credit counseling, within 180 days prior to filing for bankruptcy.
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