If you retain a bankruptcy attorney most creditors must contact your bankruptcy attorney and must cease calling you. Collection agencies cannot contact you but a creditor that holds the original debt would still be able to call you. It is essential to have a bankruptcy attorney that has knowledge and experience dealing with personal financial matters before you file and after you are discharged. Sometimes filing for bankruptcy is not in your best interest. It should always be used as a last resort. You should exercise other options before filing for a bankruptcy. Negotiating with creditors sometimes is an ideal strategy to dealing with personal financial troubles. If negotiating with creditors, then there are tax implications that often need to be addressed. If it is imperative that you file for bankruptcy to stop a garnishment or if you have debts that are too onerous to be paid it is necessary to have an attorney who can maximize your exemptions and who knows how the means test works. Jacob A. Perrone has the knowledge of bankruptcy law and experience dealing with the bankruptcy courts to allow you to obtain a "Fresh Start".Chapter 13 Bankruptcy
Chapter 13 is a personal reorganization of debts. The debtor pays his or her disposable income, which is figured by guidelines provided by the IRS and bankruptcy court, to the Bankruptcy Trustee over a 3 or 5 year period to pay creditors. After the plan has been completed the debtor receives a discharge of the remaining debt that is left after the plan has been completed. You can stop the foreclosure of your home if you file before the property is sold at a sheriff?s sale and keep your home if you propose a plan to pay the past due balances on your mortgage through your reorganization plan. Regular payments must resume after the Bankruptcy is filed but your lender is required to accept the payments. If plan payments are completed according to the terms of the plan then you receive a discharge of any remaining amounts owing. If you have a second mortgage there is an opportunity to dishcarge what is owed on a second mortgage. The Court looks at the value of your house versus the amount still owed on the first mortgage. If your home is worth more than what is owed on your first mortgage, then you may be able to strip the amount of the second mortgage that is more than the value of the propertyMeans Test
In 2005, the United States substantially changed its bankruptcy laws, adding a means test to prevent wealthy debtors from filing for Chapter 7 Bankruptcy. The most noteworthy change brought by the 2005 BAPCPA amendments occurred within 11 U.S.C. 707(b). The amendments effectively subject most debtors who make an income, as calculated by the Code, above the median income of the debtor's state to an income-based test. This test is referred to as the "means test." The means test provides for a finding of abuse if the debtor's income is higher than a specified portion of their debts. If a presumption of abuse is found under the means test, it may only be rebutted in the case of "special circumstances." Debtors whose income is below the state's median income are not subject to the means test. Notably, the Code-calculated income may be higher or lower than the debtor's actual income at the time of filing for bankruptcy. This has led some commentators to refer to the bankruptcy code's "current monthly income" as "presumed income." If the debtor's debt is business debt, not primarily consumer debt, then the means test is inapplicable.Means Test Formula
Thus, the means test is "a formula designed to keep filers with higher incomes from filing for Chapter 7 bankruptcy. (These filers may use Chapter 13 bankruptcy to repay a portion of their debts, but may not use Chapter 7 to wipe out their debts altogether.)The bankruptcy means test is rather complex but quite generous and most debtors have no trouble meeting its requirements. Consumers can use a means test calculator to determine their eligibility. Others have suggested that the means test is not all that fair or equitable, and have somewhat cynically pointed out that the reference to consumer protection in the bankruptcy act is ironic at best, since those with primarily consumer debt are required to pass a means test while businesses are not. What is undeniable is that it is complex, and the terms that govern many parts of it - including those terms that control whether it applies at all - are of unsettled definition.