If you find yourself in serious financial trouble at the start of 2018, perhaps you should consider debt negotiation or bankruptcy.
The Bankruptcy Code provides primarily two ways to resolve the debts of an individual. These processes are referred to by the Chapter headings in the Bankruptcy Code: Chapter 7 and Chapter 13. Chapter 7 is what is normally thought of as a bankruptcy and is referred to as a straight bankruptcy or a liquidation case. It is the most often filed type of bankruptcy and usually the least expensive way to discharge personal debts. However, since the revisions to the Bankruptcy Code in 2005, an individual or husband and wife together must qualify to file Chapter 7 under the means test. The means test is primarily an income qualifier which requires that the party’ or parties’ income be below the median income for the same size household in the area of the country where the bankruptcy is being filed. However, the means test only applies if the majority of the debts of the person or couple are “consumer debts”. Consumer debts would be generally those debts that are incurred by individuals outside of a business context.
Contact us to help you determine whether bankruptcy is the best financial move for you in 2018.
BY STEVEN D. KEIST,
Attorney and Founder of KTO Law Firm