Bankruptcy Lawyer Melbourne, FL

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Understanding the Means Test Before You File for Bankruptcy

If you are considering filing for bankruptcy, you may already be aware that you have two main options for filing for individual bankruptcy: Chapter 7 or Chapter 13. Each of these types of bankruptcy petitions have key differences to consider before deciding which one to file. One of the main differences is that Chapter 7 seeks to discharge certain types of debt, while Chapter 13 is aimed at constructing a repayment plan for a portion of the petitioner’s debt.

In order to qualify for a Chapter 7 bankruptcy, a petitioner must pass the means test. The eligibility requirements for this type of bankruptcy filing changed in 2005, making it more difficult to qualify. As a bankruptcy lawyer Melbourne, FL residents trust, we can explain the qualification requirements during your consultation. That said, the means test is essentially a calculation that takes a petitioner’s amount of debt and income into account in order to determine whether the petitioner can repay his or her debt. If the petitioner fails the means test, he or she will still likely have the option of filing a Chapter 13 bankruptcy petition.

The means test looks at the amount of the debtor’s excess monthly income in relation to the amount of unsecured debt to determine how much the debtor could potentially repay to creditors through a repayment plan. If the debtor passes the means test, it means that the debtor’s financial situation would not allow for the repayment of the debts. Bare in mind that some debts must be repaid, such as state taxes, your bankruptcy lawyer Melbourne, FL offers, will help you to understand this in further detail.

When a petitioner files for Chapter 7 bankruptcy, there are three forms they will receive from the court. The first form is the Chapter 7 Statement of Your Current Monthly Income (Form 122A-1). On this form, the petitioner lists all gross income they have received during the six months prior to the date they filed for bankruptcy. The amount is then compared to the median income for a family the same size in the petitioner’s state. If the petitioner’s amount of income is less than the state’s median they have passed the test and do not have to fill out the other two forms.

If their income is greater than the state’s median, they need to complete the second form, Chapter 7 Means Test Calculation (Form 122A-2). Here they will list all allowed expenses from their income, including housing costs, child care, utilities, insurance, and taxes. The calculations will show if the petitioner has any disposable income. If they do not have disposable income, they will likely qualify for Chapter 7 bankruptcy. If they do, then they may be able to file for Chapter 13. In this case, your bankruptcy lawyer Melbourne, FL respects will advise you on how to proceed.

Some petitioners are not required to take the means test, such as servicemembers engaged in active duty during certain periods, disabled veterans, and people with mostly business debt.

As a bankruptcy lawyer Melbourne, FL men and women turn to for financial advice, our firm has successful experience in filing both Chapter 7 and Chapter 13 bankruptcy petitions. For an immediate consultation with a bankruptcy lawyer Melbourne, FL provides, please call Arcadier, Biggie & Wood, PLLC.

Factors to Consider Before Filing for Bankruptcy

1.Know Your Options – There are two types of bankruptcy individuals can file: Chapter 7 and Chapter 13. With Ch. 7, your debts may be resolved within 3-6 months, but you may lose your personal property. Chapter 13 is a bit more complicated, but involves a repayment plan based upon your disposable income. Your debt may be reduced and you may get to keep your assets.

2.Learn About Alternatives – Not everyone is an ideal candidate for bankruptcy. There are alternatives that may be able to help you reduce your debt in a practical manner. A Melbourne bankruptcy lawyer can explain these to you during your initial consultation, if relevant to your situation.

3.Find Out If You Are Eligible – Before you file for bankruptcy you will have to meet certain requirements. For instance if you make enough income to pay off your debts through Ch. 13, you may not be able to file for Ch. 7. Furthermore if your debt is too high or too low, you may not be applicable for bankruptcy.

4.Understand Secure vs. Unsecured Debts – Not every type of debt is forgivable. For example alimony, student loans, tax debts, child support, and government loans will likely still need to be paid regardless of what type of bankruptcy you file for.

5.Find Out What Will Happen to Your Assets – If you are unable to make payments on a mortgage or car because of other debt, you may want to consider Ch. 13; otherwise, you could lose these assets from filing for Ch. 7.

6.Determine Whether or Not Your Credit Card Debt Will Be Relieved – Credit card debt is not always forgiven. This is especially true when you have lied on a credit card application or knowingly spent above your financial means.

7.Confirm Your Pension is Safe – Most states have laws that protect life insurance and pension plans from being affected by bankruptcy. You should confirm this with a bankruptcy lawyer in Melbourne, FL.

8.Find Out if Co-Signers Will Be Stuck With Your Debt – If you any of your agreements or contracts have a co-signer, it is possible that they will have to make payments on your debt. This can be a very serious matter so you will want to verify whether or not this holds true for your situation.

Bankruptcy and Student Loans

Many people who can go to college also leave their institution with a great deal in debt. Unfortunately, this can take months or even years to pay off. Additionally, when students loans are not your only debt, you may begin to find yourself falling behind in payments when you have rent, a mortgage, car loans, and credit card bills. Though many people do not realize they can file for bankruptcy for student loans, it is possible with the help of a bankruptcy lawyer in Melbourne, FL, such as one from  Arcadier, Biggie & Wood, PLLC. Although it is typically not as simple as taking care of other debts, you and your attorney can work to discharge both private and federal student loans by filing for bankruptcy. If you are interested in filing for bankruptcy to see how it can help your student debt, please speak with one of our bankruptcy lawyers in Melbourne, FL. We would like to get you on the path to a better financial life.

What are the steps?

The first step in this process is working with one of our Melbourne, Florida bankruptcy lawyers. While you may think the best way to handle financial situations like filing for bankruptcy is doing it yourself (why pay for an attorney when you’re already in debt?), the truth is that a bankruptcy attorney can help save you thousands in the long run by navigating the system for you and helping you file for the right kind of bankruptcy. Once you speak with one of our attorneys, we will go over your financial situation, look at your student debt, and see what the best plan of action is. Then we can look at the different types of bankruptcy.

Filing for Chapter 7 or Chapter 13 Bankruptcy

To get your student loans discharged, you must file for either Chapter 7 or Chapter 13 bankruptcy. When you wish to use the bankruptcy process to eliminate your student loans, you must file for a lawsuit called an adversary proceeding. We can write a complaint on your behalf and file this with a court. Once we do so, a judge will make a file ruling and come to a decision based off of the evidence we have provided.

Undue Hardship

When we want to discharge your student loans through bankruptcy, one of the most important things a Melbourne, FL bankruptcy lawyer must do is prove “undue hardship.” To do so, many courts have the Brunner test when proving this undue hardship that consists of three parts you must meet.

1. If you continue to pay your student loans, you will not be able to maintain a required standard of living after attempting to make more money and lower your expenses.
2. There are circumstances that make your financial situation to be the same for most—if not all—of the remainder of your loan.
3. You have persisted in good faith. This means you have done your best to work with payment plans, pay your monthly loans, increase your salary, or decrease your living expenses to pay these off on time.

 If you are considering bankruptcy to help eliminate or reduce your student loans, please speak with one of our bankruptcy lawyers in Melbourne, FL from  Arcadier, Biggie & Wood, PLLC now.

Melbourne, FL Bankruptcy FAQs

Dealing with financial difficulties can be incredibly stressful and overwhelming. When debts pile up and creditors start calling, it may seem like there is no way out. However, bankruptcy can provide a way to get a fresh financial start and put an end to the constant stress and anxiety caused by debt. While the decision to file for bankruptcy is not one to be taken lightly, it can be a valuable tool for those who need it. It is important to understand the bankruptcy process, the different types of bankruptcy, and the potential consequences before making a decision. Consulting with a bankruptcy lawyer can provide valuable insight and guidance throughout this difficult process.

1. What does a bankruptcy lawyer do?

A bankruptcy lawyer is a legal professional who assists clients in filing for bankruptcy and navigating the bankruptcy process. This includes preparing and filing the necessary documents, representing the client in court, and advising on the best course of action for the client’s financial situation. A Melbourne, FL bankruptcy lawyer can help you understand your options, protect your assets, and get a fresh financial start.

2. Do I need a bankruptcy lawyer?

While it is possible to file for bankruptcy on your own, it is highly recommended to seek the assistance of a qualified lawyer. The bankruptcy process is complex and involves a lot of paperwork and legal requirements. A bankruptcy lawyer can help ensure that all documents are filed correctly, that you are aware of all your options, and that your interests are represented in court. This can help maximize the chances of a successful outcome.

3. What types of bankruptcy can I file for?

There are several types of bankruptcy, each designed for different situations. The most common types are Chapter 7 and Chapter 13. Chapter 7 is a liquidation bankruptcy, where non-exempt assets are sold to pay off creditors. Chapter 13 is a reorganization bankruptcy, where you create a repayment plan to pay off your debts over a period of 3-5 years. Your Melbourne bankruptcy lawyer can help you determine which type of bankruptcy is best suited for your situation.

4. How will bankruptcy affect my credit?

Filing for bankruptcy will have a significant impact on your credit score. It will remain on your credit report for up to 10 years, which may make it more difficult to obtain credit, buy a home, or rent an apartment. However, it is often possible to rebuild your credit over time with responsible financial behavior. Your attorney can advise you on the best ways to rebuild your credit after bankruptcy.

5. Can all debts be discharged in bankruptcy?

No, not all debts can be discharged in bankruptcy. Certain debts, such as child support, alimony, student loans, and some tax debts, are generally non-dischargeable. However, most other debts, such as credit card debt, medical bills, and personal loans, can be discharged in bankruptcy. Your lawyer can help you understand which debts can and cannot be discharged in your case.

If you are struggling with debt and considering bankruptcy, contact the Law Offices of Arcadier, Biggie & Wood. Our experienced Melbourne bankruptcy lawyers can help you navigate the bankruptcy process and achieve a fresh financial start.

Do You Have Further Questions About Filing for Bankruptcy?

If you are in a position to consider Chapter 7 or Chapter 13 bankruptcy, you likely are facing complicated financial matters. Rather than trying to resolve this on your own, it is advisable to find out what options are available and whether or not bankruptcy is right for you. A bankruptcy lawyer Melbourne, FL trusts from Arcadier, Biggie & Wood, PLLC can provide you with legal advice that may help you to get your financial affairs back under control.