So its been a hell of year, maybe lost your job or your spouse lost their job. Unemploment is barely enough to pay for groceries, and of course credit card companies have cut their credit lines.
So you gotten behind on your credit cards, behind on your mortgage, maybe even lost your home to foreclosure.
And you been considering foreclosure! Well, the new income limits go into effect November 1 and it could make bankruptcy alot harder for many people. Gerri Detweiler – Personal finance author and Credit Advisor for Credit.com, just wrote this great article that explains what has happened.
If you are considering bankruptcy or would like a personal recomendation in California, Wisconsin, Colorado or Illinois. Contact our offices (909)742-9699 leave me a message or email me.
Lower Incomes Make It Harder For Some to Wipe Out Debts Starting Nov. 1
If you’ve been considering bankruptcy, you may need to talk with a bankruptcy attorney now. In an ironic twist, the nation’s economic woes will make it harder for debtors in some (not all) states to wipe out debts in bankruptcy come November 1, 2009. Here’s why:
Bankruptcy law was reformed in 2005, largely as the result of an industry-led effort to make it harder for people to eliminate unsecured debt by filing what’s sometimes referred to as a “straight” Chapter 7 bankruptcy case. The purported goal was to make it harder for people to “abuse” the bankruptcy system and force them into a Chapter 13 repayment plan where they would have to pay back at least some of their debts.
The “means test” was the method devised to achieve this goal. It is a complicated formula that starts with the state median income for families of a similar size. Unfortunately, because so many people are out of work or earning less, state median incomes have dropped in many places. That means more people may be subjected to the means test. And depending on the results of that calculation, they may find themselves forced into Chapter 13, or just out of luck.
The new income figures go into effect November 1, 2009. If you are curious what’s happened in your state, you can look at the before and after figures.
Warning! Do NOT look at these charts and try to determine for yourself whether you can or cannot file Chapter 7. You need a bankruptcy attorney for that. Some consumers have successfully filed Chapter 7 with incomes that are double the state median figure.
What I DO want you to do is get the help you need. If you’ve been hanging on and avoiding this difficult discussion, talk with an attorney before your problems get worse. The consultation is free and confidential, and the attorney can help you figure out what your options are – whether you decide to file or not.
Gerri Detweiler – Personal finance author and Credit Advisor for Credit.com