There are many reasons that bankruptcy filing rates are so high. Clearly an unexpected job loss or reduction in earnings can lead many honest, hardworking people into a bankruptcy lawyer's office. When a job loss is coupled with a divorce, I think that the likelihood of bankruptcy by husband or wife goes up exponentially.
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Personal bankruptcy is made for "what if" scenarios. What if I file individually instead of jointly with my wife? What if I quit my job while I am in the middle of my Chapter 13? What if I need a replacement vehicle after I file?
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It appears the Georgia Legislature is seeking to cap real estate tax re-assessment increases at 3% per year. According to the Atlanta Business Chronicle, Republican lawmakers pre-filed legislation to this effect with Georgia House of Representatives on Monday November 17, 2008. The measure, if approved would actually amend Georgia’s constitution. If the proposed constitutional amendment is approved by two-thirds of the legislature then it will be submitted to Georgia voters in the next general election held in an even year.
More on Georgia Legislature to Cap Real Estate Tax Assessment Increases?
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I am considering chapter 7. I am not sure about the median income info because I am no longer employed and working a temp job and used my retirement to live on. My question has to do with income tax refund check. I don't think I will be getting a refund this year because of my retirement penalty, but if I did get one would I have give to the bankruptcy courts because I filed bankruptcy?
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Your decision about when to file your Chapter 7 or Chapter 13 bankruptcy case can have important and far reaching consequences with regard to the bankruptcy relief you obtain. Here are some considerations about which you should be aware:
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If you are married, can you file an individual Chapter 7 or Chapter 13 and not include your spouse?
Yes you can. However (and you knew there was going to be a "however") your non-filing spouse's income and expense information, and possible his/her asset information may be relevant to your case.
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One of the trends I have noticed over the year and a half since the bankruptcy law changed is that we can no longer rely on guesses or estimates when it comes to creating a budget. My experience in a recently filed case illustrates this point.
More on Budgets in Bankruptcy Cases Must be Based on Real Numbers
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I am sitting here wondering two things…am I qualify to file bankrupcy and should I file bankrupcy.
I have unsecured debts…c/Cards and student loans avg. 50,000. I have a mortgage of 1.000 monthly. I AM ENROLLED IN CCCS AND IS PAYING ABOUT 900.00 monthly. I have high medical bills and child support payments avg. 600 monthly…after working many many hours of overtime my income last year was 54,000. I am single/seperated…what should I do and how should I do it….HELP.
–Jeff
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p>Mr. Ginsberg – I am a regular reader of your bankruptcy blog, and appreciate your time and efforts. A recent post on another bankruptcy blog raised an interesting issue on which I am wondering if there is a consensus of legal opinion.
Essentially, the question is whether the revision of 707(b) under the BAPCPA effectively precludes a “double jeopardy” type situation in which a Chapter 7 debtor could be exempt from the “means test” but subsequently face a challenge on the basis of excess disposable income. In the interest of brevity, I’ve copied the posting below:
Attorney Kevin Chern writes…
707(b)(2) May Help Debtors Under the Median Income
Tuesday, September 06, 2005
Under the old bankruptcy law, the trustee could bring a 707(b) motion alleging abuse based on a debtor's ability to repay debt with expendable income. Under BARF 707(b)(2), the judge, trustee or creditor can all bring a 707(b) motion to dismiss if the debtor's household has more than the median income for a household of that size. Logic dictates that, under the same provision, neither a creditor, nor the judge, nor the trustee has a right to bring a motion to dismiss no matter how much expendable income the debtor has so long as the debtor's household has less than the median income for a household of that size.
So, in some situations under BARF, this bright line median income test will help debtors escape 707(b) objections. Of course, the judge or trustee can still bring a motion based on 707(b)(3) alleging that the case was not filed in good faith, but, certainly, no presumption of abuse exists.
What are your thoughts on the issue? Any feedback you could provide would be appreciated.
–Chuck
Jonathan Ginsberg responds: Chuck, I would respectfully disagree with Kevin's analysis. The median income/means test is a qualification test. It is based on a 6 month look back, not on reality. The Schedule I and J budget that you file with your actual Chapter 7 case reflects actual numbers as of the date of filing.
For example, a debtor physician may satisfy the median income/means test because he was unemployed July-December. If he gets a new job in January earning $200,000 a year, his Form B22 would show zero earnings and he would not trigger the presumption. However, his schedule I & J would likely show significant disposable income. I am not aware of any cases that support Kevin's logic. Further, whether a case is successfully challenged as an abuse vs. one challenged under the good faith provision ends up at the same place – a dismissed case.
It would be interesting to see if any Court has considered the double jeopardy argument.
Technorati Tags: 707(b), substantial abuse, good faith, Chapter 7, dismissal of Chapter 7, Kevin Churn, means test, median income test
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This morning's Atlanta Journal/Constitution published an article entitled "Georgia Foreclosures Jump 99%; rate is nation's 3rd highest." According to this article, one out of every 449 houses will go into foreclosure. Why the increase? Interest rates on adjustable rate mortgages are going up. In addition, underwriting standards by major lenders were relaxed over the past few years.
In my bankruptcy office, we have been seeing the increase in foreclosure traffic in the form of clients looking to file Chapter 13 to save their homes. Chapter 13 stops a foreclosure and provides a three to five year payback of the mortgage arrearage. However, Chapter 13 cannot stop a mortgage rate from adjusting nor can it change the terms of your mortgage. Furthermore, when you file a Chapter 13, you still have to make your regular mortgage payment in addition to your Chapter 13 trustee payment.
One of the first tasks we undertake with our clients is the creation of a budget. Once we know where your money is going, we can decide if saving your house through a Chapter 13 is feasible at all. Many of my clients have never sat down to write out a budget – it can be enlightening and I recommend this process to anyone, homeowner or not.
The AJC article quotes my colleague at the bankruptcy bar, attorney Herb Heitman, who notes that lenders are much more willing to negotiate outside of bankruptcy than they were in the past. I think that this point is very important. While bankruptcy is a solution to a pending mortgage foreclosure, do not rule out direct negotiation with the lender. If you go the direct negotiation route keep the following in mind:
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