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Do I qualify for bankruptcy?

 

Chapter 7

There are many misconceptions regarding who may or may not be a successful candidate to file a Chapter 7 bankruptcy.  In 2005 the United States Congress passed a major overhaul to the Bankruptcy Code.  It is called the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA).  This new law added two significant changes to the bankruptcy process. 

 

Means Test

First the law essentially imposed a ceiling on household income in order to file a Chapter 7 bankruptcy.  This consideration is known as the Means Test.  The Means Test sets a limit on household income in order to qualify for Chapter 7 relief from your debts.  The limit varies based on one’s household size.  The current limit for a one person household in the Chicagoland area is $47,469.  A two person household is $61,443.  A three person household is $72,342.  The amount continues to increase along with the number of people residing in a household.  Those people may include family members, such as children, spouses, siblings, etc.  It also includes non-relatives such as friends and roommates.  The Means Test requires the inclusion of income brought into the household by any and all household members, whether the others are filing bankruptcy or not.  The more wage earners sharing a single household, the more difficult it becomes to qualify for a Chapter 7 bankruptcy, as all of their income is added together to determine whether that household exceeds the limit set by the Means Test.  On the otherhand unemployed household members including children, retired individuals on social security or simply unemployed adults will make it easier to file by increasing the household size, without adding to household income.  It may still be possible to qualify for Chapter 7, even if your household income exceeds the income ceiling.  This is a much more complicated calculation.  Consult with an attorney at Heller & Richmond, Ltd. to see if you meet the requirements of the Means Test and qualify for a Chapter 7 bankruptcy.

 

Pre-filing and Post-filing Certifications

Second, BAPCPA requires all those filing bankruptcy to obtain a pre-filing credit counseling certificate.  This can be obtained by taking a simple class with an approved company.  The class is usually offered online or by telephone.  It usually takes less than one hour to complete.  The cost of this class usually ranges from $15.00 to $50.00 per person.  A post-filing debtor education certificate is also required in order to successfully complete a bankruptcy.  This class offers information regarding how to manage your finances in the hopes of avoiding similar problems in the future.  It generally takes about 2 hours to complete online.  This requirement can sometimes be satisfied by attending a lecture conducted by the bankruptcy trustee assigned to your case.  The cost of this second class usually ranges from $15.00 to $50.00 per person.  An attorney at Heller & Richmond, Ltd. can provide you with more specific information regarding how to obtain these necessary certificates.

Phone: 312-781-6700  E-Mail: MRichmond@Hellerrichmond.com.
 

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