Medical Bills and Chapter 7 Bankruptcy (Pt. 2)

Chapter 7 Bankruptcy | Criteria for Chapter 7 Bankruptcy

There are some criteria you will need to meet in order to be able to file for Chapter 7 bankruptcy.

1. Bankruptcy means test

This test compares the state’s median monthly family income to your family’s income. You may not be able to file Chapter 7 bankruptcy if your monthly income exceeds the state’s median income. This test is required if more than half your debt comes from consumer purchases other than business, tax, or tort debts (debts for injuries or damages you caused to someone else).

2. You are an individual, married couple filing jointly, or small business owner

3. No recent bankruptcy discharge

You are not legally able to file Chapter 7 bankruptcy if you had a previous Chapter 7 bankruptcy discharge within the past 8 years, or a Chapter 13 bankruptcy discharge within the past 6 years. The filing period starts the date your previous bankruptcy was filed, rather than when the bankruptcy was discharged.

4. No recent bankruptcy dismissal

You are not able to file Chapter 7 bankruptcy if you had a bankruptcy dismissed within the past 180 days for any of the following reasons: you violated a court order, abused the bankruptcy system, made a fraudulent bankruptcy filing, or requested a dismissal because a creditor requested the automatic stay be lifted.

5. Credit counseling required

To be able to file any type of bankruptcy, you are required to receive credit counseling from a government-approved credit counseling agency. You are not required to get counseling before filing bankruptcy, but it must be completed no more than 180 days prior to the bankruptcy discharge and it must include a two-hour financial management course.

Agencies offering this management course aren’t always non-profit, but they should be able to offer free or lower cost services.

Your bankruptcy case will be dismissed if you do not go through credit counseling within the specified time frame.

Considering Bankruptcy?

Because Chapter 7 can be so devastating, and can only be done once every seven years, it might be smart to weigh your particular combination of debt, income, and property before you decide it’s the option for you. And even then you might decide against it.

How Declaring Bankruptcy Can Help

Typically those who file for bankruptcy really do need it. Often the filer is already in a fragile economic position with large amounts of credit card debt when they are suddenly stuck with a bout of hard luck such as a loss of job, injury, divorce, or uninsured medical expenses that then result in mounting penalties and thus an unpayable amount of debt.

Bankruptcy law was designed to help people who need assistance to make a clean and quick break from the debt. In a few months it can wipe out unsecured debt such as credit and medical debts.

Exemption

But even if you find yourself faced with unpayable debt, you still may not need bankruptcy to protect your assets. Under the Exemption Laws of California, you may already be “judgment-proof.” If you are declared as “judgment-proof” you need not fear credit card companies simply because of debts owed tothem. Unsecured creditors such as credit card companies cannot take your stuff if it’s exempt. Harassing phone calls can be stopped with a simple phone call or letter. But it’s important to remember that interest and penalties will continue to accumulate. Also, exemption laws do not protect property from all types of debts or all types of creditors. Typically, exemption laws do not protect against collection of child support or tax debts. And if you purchased property and pledged it as collateral for the purchase-money loan the lender can still take the property, regardless of any exemption law.

Non-dischargeable Debts

It’s important to remember there are some kinds of debts that bankruptcy can’t get rid of called “nondischargeable” debts. This type of debt generally includes child support, most student loans, and most tax debts. Even if you decide to declare bankruptcy you are still liable to pay these.

Working with a Bankruptcy Attorney

Bankruptcy law can be hard to understand. Because of this, it’s highly advised that you work with a bankruptcy attorney that can walk you through the process and clarify any questions or concerns you might have. There can be a lot of questions during this extremely stressful time. Let the lawyers at Pinkston & Pinkston walk you through the process so you can achieve the best outcome possible. – Simon Resnik

Specializing in bankruptcy and foreclosure law for over 20 years. Call attorney David Pinkston for a free consultation today: 904.306.5791. #FloridaBankruptcyAttorney #FloridaBankruptcy

If you are thinking about #bankruptcy or #foreclosure in the Jacksonville, Florida area, you should call attorney David Pinkston. David is very experienced with all aspects of bankruptcy law yet very personable and easy to talk to. Call Us Today! 904.306.5791