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1 Person |
$41,877 |
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2 People |
$49,052 |
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3 People |
$62,480 |
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4 People |
$70,887 |
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5 People |
$77,187 |
(add $6300 for each additional household member)
Income (Prior Six Months)
The new bankruptcy law considers your six month average income at the time of filing. This can be a problem if your income was well above median recently but has just dropped. In any case, if you have had a major income drop within the past six months, we need to discuss it when you come in.
Class #1 - Credit Counseling Certificate
(Must be done before filing.)
You must complete a credit counseling class before you can file bankruptcy. You can take the class online or on the telephone if you wish and it costs about $50. This can be done in my office at your first appointment. See list of approved agencies below.
Correct Creditor Addresses & Account Numbers
The new bankruptcy law requires that you give notice to creditors at the address that appears on your bills. You must bring all your bills to the office so that we can properly notify each creditor and include the account number. If you do not have your bills, you should pull a complete credit report including all creditor addresses free at www.annualcreditreport.com.
Pay Stubs from Work
We have to file copies of your pay stubs from work covering the last 60 days. If you have lost a pay stub you can ask your employer for another copy. If you do not receive pay stubs you may be able to go online with your employer and print something off showing gross wages, deductions, net income etc. If you do not receive wages I can have you complete an affidavit to that effect.
Most Recent State and Federal Tax Returns
You must bring copies of your most recent state and federal tax returns to my office so I can provide those to the trustee. If you have past due taxes, you should go ahead and file them before filing your bankruptcy. Taxes are not past due until April 16th.
Class #2 - Financial Management Certificate
(Must be done after filing.)
After your bankruptcy is filed you must take the second class on financial management. Again, you can take this online or on the phone and it costs around $50. Bring the certificate to your hearing and give it to me so I can file it with the Court. See recommended provider below.
Divorce & Back Child Support Debt
If you owe money ordered paid in a divorce decree or back child support it is not discharged in bankruptcy. The trustee can also sell your exempt property to pay off your back child support under the new law, so we will need to discuss any back child support that you may owe.
Document Requirements (bring to meeting with attorney)
You must bring a government issued photo ID (drivers license is best) and your social security card or proof of social security number such as a W2 or tax return. You also must bring your most recent check stub from work (you will have received this after filing your bankruptcy) and copies of the most recent statement on each of your bank accounts. If you are not receiving wages at the time of your hearing you need to write that down on a piece of paper and sign it and bring the paper so the trustee will have a document in their file to show that you do not receive wages.
Approved Credit Counseling Providers (Class #1)
You can complete the credit counseling session in my office. I will assist you. My office highly recommends Greenpath Debt Solutions.
Credit Counseling and Counseling Organizations
Choosing a Credit Counselor (my Office Recommends Greenpath Debt Solutions)
Living paycheck to paycheck? Worried about debt collectors? Can't seem to develop a workable budget, let alone save money for retirement? If this sounds familiar, you may want to consider the services of a credit counselor. Many credit counseling organizations are nonprofit and work with you to solve your financial problems. But beware--just because an organization says it is "nonprofit" doesn't guarantee that its services are free or affordable, or that its services are legitimate. In fact, some credit counseling organizations charge high fees, some of which may be hidden, or urge consumers to make "voluntary" contributions that cause them to fall deeper into debt.
Most credit counselors offer services through local offices, the Internet, or on the telephone. If possible, find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals. Choosing a Credit Counseling Organization
Reputable credit counseling organizations advise you on managing your money and debts, help you develop a budget, and usually offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your entire financial situation with you, and help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.
A reputable credit counseling agency should send you free information about itself and the services it provides without requiring you to provide any details about your situation. If a firm doesn't do that, consider it a red flag and go elsewhere for help.
Credit Counseling and Counseling Organizations
Once you've developed a list of potential counseling agencies, check them out with your state Attorney General, local consumer protection agency, and Better Business Bureau. They can tell you if consumers have filed complaints about them. (If they don't have complaints about them, it's not a guarantee that they're legitimate.) Then, it's time for you to interview the final "candidates."
Questions to Ask
Here are some questions to ask to help you find the best counselor for you.
What services do you offer?
Look for an organization that offers a range of services, including budget counseling, and savings and debt management classes. Avoid organizations that push a debt management plan (DMP) as your only option before they spend a significant amount of time analyzing your financial situation.Do you offer information? Are educational materials available for free?
Avoid organizations that charge for information.In addition to helping me solve my immediate problem, will you help me develop a plan for avoiding problems in the future?
What are your fees? Are there set-up and/or monthly fees?
Get a specific price quote in writing.What if I can't afford to pay your fees or make contributions?
If an organization won't help you because you can't afford to pay, look elsewhere for help.Will I have a formal written agreement or contract with you?
Don't sign anything without reading it first. Make sure all verbal promises are in writing.Are you licensed to offer your services in my state?
What are the qualifications of your counselors? Are they accredited or certified by an outside organization? If so, by whom? If not, how are they trained?
Try to use an organization whose counselors are trained by a non-affiliated party.What assurance do I have that information about me (including my address, phone number, and financial information) will be kept confidential and secure?
How are your employees compensated? Are they paid more if I sign up for certain services, if I pay a fee, or if I make a contribution to your organization?
If the answer is yes, consider it a red flag and go elsewhere for help.
What Is Bankruptcy?
Basic information on Chapter 7 and Chapter 13 bankruptcy.
Bankruptcy is a federal court process designed to help consumers and businesses eliminate their debts or repay them under the protection of the bankruptcy court. Bankruptcies can generally be described as "liquidations" or "reorganizations."
Chapter 7 bankruptcy is the liquidation variety -- property is sold (liquidated) to pay off as much of your debt as possible, while leaving you with enough property to make a fresh start. Chapter 13 is the most common type of "reorganization" bankruptcy for consumers -- you repay your debts over three to five years.
Both kinds of bankruptcy have numerous rules -- and exceptions to those rules -- about what kinds of debts are covered, who can file, and what property you can and cannot keep.
Liquidation (Chapter 7)
Liquidation bankruptcy is called Chapter 7, and it can be filed by individuals (a "consumer" Chapter 7 bankruptcy) or businesses (a "business" Chapter 7 bankruptcy). A Chapter 7 bankruptcy typically lasts three to six months.
In a liquidation bankruptcy, some of your property may be sold to pay down your debt. In return, most or all of your unsecured debts (that is, debts for which collateral has not been pledged) will be erased. You get to keep any property that is classified as "exempt" under the state or federal laws available to you (such as your clothes, car, and household furnishings). If you don't own much, chances are that all of your property is exempt and you have what is known as a "no asset" case.
If you owe money on a secured debt (for example, a car loan, where the car is pledged as a guarantee of payment), you have a choice of allowing the creditor to repossess the property; continuing your payments on the property under the contract (if the lender agrees); or paying the creditor a lump sum amount equal to the current replacement value of the property. Some types of secured debts can be eliminated in Chapter 7 bankruptcy.
An Overview of Chapter 7 Bankruptcy
Learn how Chapter 7 bankruptcy works.
Chapter 7 bankruptcy is sometimes called "liquidation" bankruptcy -- it cancels your debts, but you might have to let the bankruptcy court liquidate (sell) some of your property for the benefit of your creditors.
Chapter 7 bankruptcy refers to the chapter of the federal statutes (the Bankruptcy Code) that contains the bankruptcy law.
Bankruptcy Costs in Time and Money
The whole Chapter 7 bankruptcy process takes about four to six months, costs $274 in filing and administrative fees, and commonly requires only one trip to the courthouse.
Who Can File
Chapter 7 can be a powerful remedy for debt problems, but it isn't available to everyone. For example, you won't be able to use Chapter 7 if you already received a bankruptcy discharge in the last six to eight years (depending which type of bankruptcy you filed) or if, based on your income, expenses, and debt burden, you could feasibly complete a Chapter 13 repayment plan.
To file for bankruptcy, you fill out a two-page petition and a number of other forms. Then you file the petition and forms with the bankruptcy court in your area. Basically, the forms ask you to describe:
- your property
- your current income and its sources
- your current monthly living expenses
- your debts
- property you claim the law allows you to keep through the bankruptcy process (called "exempt property") -- most states let you keep some equity in your home, clothing, household furnishings, Social Security payments you haven't spent, and other necessities such as a car and the tools of your trade.
- property you owned and money you spent during the previous two years, and
- property you sold or gave away during the previous two years.
An Overview of Chapter 7 Bankruptcy
You must also file a certificate showing that you have completed credit counseling with an agency approved by the United States Trustee. (For a list of approved agencies in each state, go to the Trustee's website, www.usdoj.gov/ust, and click "Credit Counseling and Debtor Education.")
If you're facing an emergency, like a foreclosure or repossession in the next few days, you can file just the two-page petition, but you must file the rest of the forms within 15 days.
Bankruptcy's Magic Wand -- The Automatic Stay
Filing for bankruptcy puts into effect an "Order for Relief" -- known informally as the "automatic stay." The automatic stay immediately stops most creditors from trying to collect what you owe them. So, at least temporarily, creditors cannot legally grab ("garnish") your wages, empty your bank account, go after your car, house, or other property, or cut off your utility service or welfare benefits.
Bankruptcy Court's Control Over Your Financial Affairs
By filing for bankruptcy, you are technically placing the property you own and the debts you owe in the hands of the bankruptcy court. You can't sell or give away any of the property you own when you file, or pay off your pre-filing debts, without the court's consent. However, with a few exceptions, you can do what you wish with property you acquire and income you earn after you file for bankruptcy.
The Bankruptcy Trustee
The court exercises its control through a court-appointed person called a "bankruptcy trustee." The trustee's primary duty is to see that your creditors are paid as much as possible on what you owe them. And the more assets the trustee recovers for creditors, the more the trustee is paid.
The trustee (or the trustee's staff) will examine your papers to make sure they are complete and to look for nonexempt property to sell for the benefit of creditors. The trustee will also look at your financial transactions during the previous year to see if any can be undone to free up assets to distribute to your creditors. In most Chapter 7 cases, the trustee finds nothing of value to sell.
The Creditors Meeting
A week or two after you file, you (and all the creditors you list in your bankruptcy papers) will receive a notice that a "creditors meeting" has been scheduled. The trustee runs the meeting and, after swearing you in, may ask you questions about your bankruptcy and the papers you filed. The trustee will ask you whether the information in your papers is 100% true. Creditors rarely attend this meeting, but if they do, they may question you under oath about where collateral is located or about information you gave them to obtain the loan.
This meeting, which takes place somewhere in the courthouse, rarely lasts more than a minute or two. In the vast majority of Chapter 7 bankruptcies, this is the debtor's only visit to the courthouse.
What Happens to Your Property
If, after the creditors meeting, the trustee determines that you have some nonexempt property, you may be required to either surrender that property or provide the trustee with its equivalent value in cash. If the property isn't worth very much or would be cumbersome for the trustee to sell, the trustee may "abandon" the property -- which means that you get to keep it, even though it is nonexempt.
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As it turns out, any property owned by most Chapter 7 debtors is either exempt or is essentially worthless for purposes of raising money for the creditors. As a result, few debtors end up having to surrender any property, unless it is collateral for a secured debt.
How Your Secured Debts Are Treated
If you've pledged property as collateral for a loan, the loan is called a secured debt. The most common examples of collateral are houses and automobiles. If you're behind on your payments, the creditor can ask to have the automatic stay lifted in order to repossess or foreclose on the property. However, if you are current on your payments, you can keep the property and keep making payments as before -- unless you have enough equity in the property to justify its sale by the trustee.
If a creditor has recorded a lien against your property without your consent (for example, because the creditor obtained a court judgment against you), that debt is also secured. You may be able to wipe out the lien in bankruptcy.
The Bankruptcy Discharge
At the end of the bankruptcy process, all of your debts are wiped out (discharged) by the court, except:
- debts that automatically survive bankruptcy, unless the court rules otherwise (for example, child support, most tax debts, and student loans), and
- debts that the court has declared nondischargeable because the creditor objected (for example, debts incurred by your fraud or malicious acts).
After Bankruptcy
Once you receive your bankruptcy discharge, you no longer legally owe your creditors for any discharged debts. You can resume your economic life without court supervision, except you must tell the court if you receive (or become eligible to receive) an inheritance, insurance proceeds, or proceeds from a divorce settlement within 180 days of the date you originally filed your papers.
You can start rebuilding your credit, but it will take several years before you can get decent interest rates on a credit card, mortgage, or car loan. You can't file for Chapter 7 bankruptcy again for another eight years from the date of your filing.
An Overview of Chapter 13 Bankruptcy
The basic steps involved in a typical Chapter 13 case.
Chapter 13 bankruptcy, sometimes called the wage earner's plan, or reorganization bankruptcy, is quite different from Chapter 7 bankruptcy (which wipes out most of your debts). In a Chapter 13 bankruptcy, you use your income to pay some or all of what you owe to your creditors over time -- anywhere from three to five years, depending on the size of your debts and income.
Chapter 13 bankruptcy isn't for everyone. Because Chapter 13 requires you to use your income to repay some or all of your debt, you'll have to prove to the court that you can afford to meet all of your payment obligations. If your income is irregular or too low, the court might not allow you to file for Chapter 13.
If your total debt burden is too high, you are also ineligible. Your secured debts cannot exceed $922,975, and your unsecured debts cannot be more than $307,675. A "secured debt" is one that gives a creditor the right to take a specific item of property (such as your house or car) if you don't pay the debt. An "unsecured debt" (such as a credit card or medical bill) doesn't give the creditor this right.
The Chapter 13 Process
Before you can file for bankruptcy, you must receive credit counseling from an agency approved by the United States Trustee's office. (For a list of approved agencies, go to the Trustee's website at www.usdoj.gov/ust/, and click "Credit Counseling and Debtor Education.") These agencies are allowed to charge a fee for their services, but they must provide counseling free or at reduced rates if you cannot afford to pay.
Once you've completed your counseling, the credit counseling agency will give you a certificate showing that you met the requirement. To begin your bankruptcy case, you must file this certificate with the bankruptcy court, along with a packet of forms listing what you own, earn, owe, and spend. You'll also need to submit your federal tax return for the previous year and proof that you filed federal and state tax returns for the previous four years. In addition, you must file a Chapter 13 repayment plan showing how you will pay off your debt. And you'll have to pay the filing fee, which is currently $274.
An Overview of Chapter 13 Bankruptcy
The Chapter 13 Repayment Plan
This form is the most important paper in your entire Chapter 13 bankruptcy case. It describes in detail how (and how much) you will repay each of your debts. There is no official form for the plan, but many courts have designed their own forms.
Making Payments on the Repayment Plan
You must begin making payments under your Chapter 13 repayment plan within 30 days after you file it with the bankruptcy court. Usually, you make payments directly to the bankruptcy trustee (the person appointed by the court to oversee your case). Once your repayment plan is confirmed, the trustee will distribute the money to your creditors.
If you have a regular job with regular income, the bankruptcy court may order that your monthly payments be automatically deducted from your wages and sent directly to the bankruptcy court.
How Much You Must Pay
Your Chapter 13 plan must pay certain debts in full. These debts, which include child support and alimony, wages you owe to employees, and certain tax obligations, are called "priority debts," because they're considered sufficiently important to jump to the head of the bankruptcy repayment line.
In addition, your plan must include your regular payments on secured debts, such as a car loan or mortgage, as well as repayment of any arrearages on the debts (the amount by which you've fallen behind in your payments).
The plan must show that any disposable income you have left after making these required payments will go towards repaying your unsecured debts, such as credit card or medical bills. You don't have to repay these debts in full (or at all, in some cases). You just have to show that you are putting any remaining income towards their repayment.
How Long Your Plan Will Last
The length of your repayment plan depends on how much you earn and how much you owe. If your average monthly income over the six months prior to the date you filed for bankruptcy is higher than the median income for your state, you'll have to propose a five-year plan. If your income is lower than the median, you may propose a three-year plan. (To get the median income figures for your state, go to the United States Trustee's website,
Driver's License or State ID & Social Security card
- Pay Stubs for the past 2 months
- Copies of all Bills, Summons or Judgments against you by creditors
- Divorce Judgments or Decrees
- Real Estate Documents, Deeds
- Property Tax Bills (SEV)
- Mortgage Balance
- Recorded Mortgage and Deed
- Car Titles
- Income Tax Returns & W2 forms
for the last 2 years 
