About Me
“ Craig D. Robins, Esq., has been a practicing Long Island bankruptcy attorney for over twenty-four years ”
Chapter 7 Bankruptcy
Written by Craig D. Robins, Esq.I just attended a seminar last week offered through the National Association of Chapter 13 Trustees about HAMP. Here’s some useful information.
Today’s post is Part One. I will continue tomorrow with a detailed discussion of bankrutpcy issues.
What Is HAMP?
HAMP (Home Affordable Modification Program) is one of President Obama’s initiatives to make a dent in home affordability by using the economic bailout program.
It’s a quasi-voluntary program to modify home mortgages with the goal of getting the monthly payment to 31% of gross (pre-tax) income.
The program seeks to provide taxpayer-funded incentives to mortgage servicers and lenders to voluntarily modify mortgages. The program was created in March 2009. This government program earmarked $75 billion for this purpose.
HAMP will reduce a homeowner’s monthly mortgage payment on a TEMPORARY basis. However, the adjustment becomes permanent after the homeowner makes three on-time payments.
The incentive for mortgage lenders in doing this is that the Obama administration is offering big bucks in incentive payments to lenders.
Here is the official link to Home Affordable Modification Program.
Home Affordable Modification Program Has Not Worked Well So Far
To date, results for HAMP have been very disappointing. I wrote about this at length two months ago: Obama’s “Making Homes Affordable” Mortgage Modification Program Failing.
The program has only resulted in 116,000 permanent modifications in the entire country, in which each borrower is saving about $500 per month.
Incidentally, these homeowners typically went from paying 45% of their gross income towards their mortgage, down to 31%, which is the goal of the program.
To date, only 110 mortgage servicers have signed participation agreements. All Fannie Mae and Freddie Mac loans are automatically eligible.
Who Is Eligible for HAMP?
Here are the requirements:
1. You must be the owner and occupant of the home and utilize it as your primary residence
2. You must have a maximum principal balance of $729,750
3. You must have a monthly mortgage payment that is greater than 31% of pre-tax monthly income
4. You must be unable to afford your current payment
5. You must not have applied for HAMP before
Why Have Many Considered HAMP to be a Failure So Far?
Many homeowners applied for HAMP assistance because they thought it would help them avoid bankruptcy. However, a great many mortgage servicers were unprepared to handle HAMP applications and were not able to process the mortgage modification requests quickly enough to offer any real relief.
Some problems were highly publicized. For example, there have been lenders who refused to even acknowledge receipt of mortgage modification documents, and other lenders who lost these documents numerous times for the same homeowner.
To Be Continued This Week
Written by Craig D. Robins, Esq.In every consumer bankruptcy case, whether it is a Chapter 7 bankruptcy or a Chapter 13 bankruptcy, there will be an initial hearing at the bankruptcy court about one month after the case is filed. If you filed for bankruptcy, you are required to attend.
What’s Happens at the Meeting of Creditors in Bankruptcy Court?
The purpose of the hearing is for the court-appointed trustee to ask you questions about your financial situation, the reason why you have debt problems, and whether you have any non-exempt assets.
This meeting is rather informal, as it is not in a courtroom, and it is not before a bankruptcy judge. Instead, it is in a hearing room, and it is before a trustee, who is a bankruptcy attorney, and not a judicial officer. See my post: Don’t Call the Bankruptcy Trustee, “Your Honor”.
As a matter of fact, the bankruptcy law even bars bankruptcy judges from attending the Meeting of Creditors. See: Bankruptcy Judges Are Barred by Law From Attending the Meeting of Creditors .
A bankruptcy trustee presides over the meeting by calling cases, one at a time. When your case is called, you sit at a table in the front of the room with your bankruptcy lawyer, and the trustee asks questions after you’ve been sworn in. To learn more about trustees, see What Is a Bankruptcy Trustee?
Most meetings are relatively short and uneventful. Although they will typically last just a matter of a few minutes, you may wait as much as 60 to 90 minutes for your hearing. The meetings are recorded by an electronic device, and there is a microphone on the table.
Since the meetings are somewhat informal, you do not have to get dressed up or wear a suit.
The Meeting of Creditors is also commonly referred to as the “341 Hearing” or “341 Meeting” because it is Bankruptcy Code section 341 that contains the law regarding such meetings.
Role of the Bankruptcy Trustee
The trustee is charged with several obligations which include making sure the bankruptcy petition is properly prepared, making sure any assets you intend to keep are protected by exemption statutes, ensuring that you properly completed the Means Test, and ascertaining whether you have any non-exempt assets that can be sold for the benefit of creditors.
It is usually rare, but not uncommon, that a trustee determines that there are non-exempt assets. The most common types of non-exempt assets include cars, tax refunds and personal injury law suits. In each case, if the asset is worth more than the exemption amount, the trustee can administer the asset. For more information about whether a trustee will pursue an asset, see: The Back-Door Politics Behind Trustees Pursuing Non-Exempt Assets.
If you live in New York, you can check some of the most common bankruptcy exemptions here: Bankruptcy Exemptions in New York.
If the trustee does try to sell an asset, he is entitled to be compensated for doing so. Information about this is in this post: How Does a Chapter 7 Bankruptcy Trustee Sell Assets .
Some clients primarily speak a second language like Spanish, and need the assistance of an interpreter. In the Central Islip Bankruptcy Court, the court now provides interpretation services at the Meeting of Creditors. See: Interpreters in Bankruptcy Court .
It is relatively rare that a creditor will show up. Generally speaking, credit card companies, which constitute the most common type of creditor, will never show up. I discussed this in my post: Will Creditors Show Up For My Hearing In Bankruptcy Court? However, If a Creditor Shows Up at the Meeting of Creditors in Bankruptcy Court, What Questions Can They Ask?
As far as questions at the Meeting of Creditors that the trustee asks you, it is very important to answer each question accurately and honestly, but you should not provide any additional information, other than simply answering the question. For more about how you should answer questions, see this post: How Much Should You Say at the Meeting of Creditors in Bankruptcy Court?
When Is the Meeting of Creditors?
This is the topic of an article I recently wrote: When Is My Meeting of Creditors in Bankruptcy Court?. Generally, the meeting is about one month after the date of filing. There is a lot of information on this post.
What Can Go Wrong at the Meeting of Creditors?
The vast majority of hearings at the Meeting of Creditors go very smoothly and last just a few minutes. If your bankruptcy attorney did a good job in drafting the bankruptcy petition and preparing you for the meeting, everything should go find.
Nevertheless, lots of things can happen at the Meeting of Creditors to complicate things. Several years go I wrote a lengthy series of articles for the Suffolk Lawyer about how to address unusual issues that may arise at the Meeting of Creditors in bankruptcy court.
If you have a Meeting of Creditors coming up, this series of articles should be extremely useful:
Preparation for the Meeting of Creditors is Key
I cannot stress how important it is to have your bankruptcy attorney prepare you for the meeting of creditors.
In my Long Island bankruptcy practice, we review with each client the various questions the trustee will most likely ask, as well as our client’s responses, to ensure that the meeting will go smoothly. We usually do this a few days prior to the meeting.
Are You Curious About Your Bankruptcy Trustee?
If your hearing is in the Central Islip Bankruptcy Court, which is in the Eastern District of New York, you can read profiles about each trustee and see their picture, most of which I took. Here is the link: Bankruptcy Trustee Profiles .
Can the Trustee Decline to Grant You Bankruptcy Relief at the Meeting of Creditors?
The answer is “absolutely not.” The purpose of the meeting is for the trustee to obtain information about your case. The trustee does not have the ability to take any action against you or decide whether or not you are entitled to a discharge.
Only a bankruptcy court judge can do such things. Also, every debtor is entitled to a discharge unless a proceeding is brought challenging discharge — and these are very rare.
Directions to the Central Islip Bankruptcy Court on Long Island
If your meeting of creditors is in Central Islip, here’s how to get to the court: Directions to Central Islip Bankruptcy Court - Long Island .
Written by Craig D. Robins, Esq.Many of our clients are justifiably anxious about meeting with a bankruptcy for the first time.
However, a good, experienced bankruptcy attorney should be able to put the client at ease, review their financial situation, explain whether bankruptcy is a good option, and if so, discuss how a bankruptcy filling will work.
What Documents Should You Bring to the Bankruptcy Attorney?
Getting the most from your first bankruptcy consultation requires that you bring certain financial papers. I’ve learned that in order to best advise clients about bankruptcy and consider all of the various options, I need to know all of the details of their finances.
Here is a list of documents that I typically ask my Long Island bankruptcy clients to bring to their first meeting with me:
• One recent bill from each creditor
• Collection letters and any law suit papers
• As many pay stubs as you can locate for the past six or seven months
• Tax returns for the past two years
• Drivers license and Social Security card
• Collection letters and any law suit papers
• As many pay stubs as you can locate for the past six or seven months
• Tax returns for the past two years
• Drivers license and Social Security card
There are other papers we will need if we go forward with a bankruptcy filing, but the above items usually enables us to meet with the client and review their situation.
Written by Craig D. Robins, Esq.I was prompted to write this blog post because I just filed a Long Island Chapter 7 bankruptcy case and the court scheduled the meeting of creditors for a date that is only 25 days away. With every other case I’ve filed during the past few years, the hearing was always over a month later.
So what’s the story with when the meeting of creditors is held?
What is a Section 341 Hearing?
First, In every single bankruptcy case, be it Chapter 7, 11 or 13, there is an initial meeting at the bankruptcy court called the Meeting of Creditors. In consumer cases under Chapter 7 or Chapter 13, the purpose of the meeting is for the court-appointed trustee to review the case with the debtor by examining the debtor under oath.
Section 341 of the Bankruptcy Code provides for this hearing, which is why it is often referred to as the “341 Hearing.”
The Bankruptcy Rules Provide the Time Frame For Holding the Meeting of Creditors
Although the 341 hearing is usually held about a month after the petition is filed, it can sometimes be held much earlier than that, and other times, much later.
Bankruptcy Rule 2003(a) sets forth the time parameters for the 341 Hearing:
In a Chapter 7 or Chapter 11 case, the meeting must be held no fewer than 20 days, and no more than 40 days after the date the petition is filed.
However, in a Chapter 13 case, the meeting shall be held no fewer than 20 days, and no more than 50 days after the date of filing.
When the bankruptcy court is operating very efficiently, meetings tend to be sooner. When the court is overburdened, or trustees are taking vacations, the time frame is longer.
When the there was a massive rush of bankruptcy filings in September and October 2005 because consumers were anxious to file their bankruptcy petitions before the bankruptcy laws were about to change, the bankruptcy court could not accommodate the great number of cases, and most debtors in New York had to wait 60 to 100 days for their 341 hearings.
There’s Lots of Information About Preparing for the Meeting of Creditors on this Blog
One of the biggest concerns my clients have is how to prepare for the meeting of creditors and what to do about going to the bankruptcy court for the very first time. As such, I have written extensively about this.
If you have a meeting of creditors coming up, the following posts will be helpful:
If You Have a Meeting of Creditors Coming Up Soon on Long Island and You Want to Find Out Info About Your Trustee
I have a series of posts containing biographies of all of the Long Island Chapter 7 and Chapter 13 trustees: biographies and profiles of Long Island bankruptcy trustees and judges.
You Must Provide Identification at the Meeting of Creditors
Here is a post about what identification you need to provide when you go to bankruptcy court: You Need Certain Identification to File for Bankruptcy.
Will Creditors Show Up At the Meeting of Creditors?
It’s very unlikely that creditors will show up: Will Creditors Show Up For My Hearing In Bankruptcy Court? However, here’s a post I wrote about what kind of questions they can ask if they do show up: If a Creditor Shows Up at the Meeting of Creditors in Bankruptcy Court, What Questions Can They Ask? .
Directions to the Central Islip Bankruptcy Court on Long Island
If your meeting of creditors is in Central Islip, here’s how to get to the court: Directions to Central Islip Bankruptcy Court - Long Island .
Written by Craig D. Robins, Esq.
This post is the fourth in a series of articles that I’ve writtten this week addressing every aspect you will need to know about filing bankruptcy, protecting tax refunds, and related issues. Links to all posts in this series are at the bottom of the page.
What Should You Do If You Expect a Large Tax Refund, But Haven’t Filed the Bankruptcy Petition Yet?
TIP: Here’s where pre-bankruptcy planning becomes very important. If you expect a large refund, you may want to delay the filing of your bankruptcy petition until you receive the refund and spend it down in an appropriate manner.
Using a large tax refund to pay your rent or mortgage, buy food, make a car payment, or even pay your bankruptcy attorney, are all types of payments that are consistent with filing for bankruptcy in good faith. Sometimes the refund can also be used to buy necessary clothing or furniture, fix your house, repair your car, or get necessary dental work done.
However, you cannot pay existing debts to friends or relatives, give the money away, gamble it away, or buy luxury goods. In general, using it to pay any reasonable and necessary expenses is O.K.
Since pre-bankruptcy planning can be tricky in order to do it in a way that complies with the bankruptcy law, it is always best to seek the advice of a competent bankruptcy attorney before doing so.
Exempting the Tax Refund in the Bankruptcy Petition
If you need to file your bankruptcy petition before you recieve the refund, you must list it in the petition.
To protect your tax refund, you must exempt it by including it as an asset in the Schedule B, which is the Schedule of Personal Property, by stating the anticipated amounts of both the Federal and State refunds, and by listing the exemption and the correct exemption statute (New York C.P.L.R. section 5206) in Schedule C to the petition, which is the Schedule of Exemptions.
If you have to file your bankruptcy petition before preparing your tax return, then you will not know the amount of your refund (which is fairly common because most people don’t do prepare their tax returns until April). In such situations, you should nevertheless list it as “possible income tax refund for the 2009 tax year. . . . Amount $ - unknown -”
You May Be Able to Keep a Non-Exempt Tax Refund If It Is Small
Generally, trustees will only administer non-exempt assets if it is reasonable to do so. If the tax return is relatively small, it will probably be administratively inconvenient for the trustee to be burdened with all of the work necessary to distribute a very small amount.
I previously wrote a post about the issues a Chapter 7 trustee considers in deciding whether to take a debtor’s money or assets to distribute to creditors: Sometimes Debtors Can Keep Non-Exempt Assets in Chapter 7 Bankruptcy Cases .
Quick Links to All Tax Week Blog Posts About Tax Refunds and Bankruptcy:
Informative Article About Eliminating Taxes in Bankruptcy:
Article About Tax Consequences and Bankruptcy:
Written by Craig D. Robins, Esq.
This post is part of a series of articles this week addressing every aspect you will need to know about filing bankruptcy, protecting tax refunds, and related issues. Links to all posts in this series are at the bottom of the page.
Trustees Look Very Closely at Potential Tax Refunds at This Time of Year
The first four months of the year leading up to April 15th is tax season, and trustees will spend extra time and attention looking at the possibility of tax refunds to determine if they should be turned over. They also will continue to do so for a number of weeks thereafter.
Most people will not file their 2009 tax return until after mid-February. Thus, if your meeting of creditors is quickly coming up, you probably have not yet done your tax return. Many trustees will hold your case open until you do file last year’s tax return.
However, if your tax refunds in prior years were relatively small, and it appears that your tax refund for last year will also be small, then the trustee will likely close your case.
On the other hand, if you own your home and are claiming the homestead exemption, then any tax refund you receive will not be protected. In such situations, the Chapter 7 trustee will definitely want to hold your case open to see if you have any significant tax refund.
If you already filed your tax return and it shows that you will be receiving a large tax refund, and if the amount of the refund combined with your other liquid assets greatly exceeds the exemption amount ($2,500 per person), then the trustee will likely direct you to turn over your refund so that he can distribute it to your creditors.
If the trustee wants to keep your case open until you provide him with a copy of the bankruptcy petition, he will probably want your attorney to sign a stipulation which gives the trustee additional time to object to your case if you fail to comply or cooperate.
TIP: It is always best, if you are planning to file for bankruptcy, or if you have recently filed for bankruptcy, to file your tax return as soon as possible. That way, your bankruptcy attorney can review it and determine the best strategy for going forward with your case. In addition, you can minimize the amount of time the trustee will keep your bankruptcy case open for.
Suppose Your Tax Refund is Large and Non-Exempt, But You Filed Your Bankruptcy Petition Last Year
If the trustee appears entitled to the refund because it is not exempt, but you filed the return last year, the trustee should not take the entire refund. In such cases, the trustee is not entitled to any part of the refund that you earned after the date you filed the bankruptcy petition.
The Chapter 7 trustee will thus take a pro-rata portion of the refund based on the percentage of the year that has already passed at the time the petition was filed.
TIP: If you expect a large tax refund, you can minimize the possibility of having to turn this over to a trustee if you revise your withholding exemptions, so that less tax is withheld. Although it may be too late for some consumers to take advantage of this, those who read this post in the future can avail themselves of this tip. Speaking with an accountant about this is always best.
Quick Links to All Tax Week Blog Posts About Tax Refunds and Bankruptcy:
Informative Article About Eliminating Taxes in Bankruptcy:
Article About Tax Consequences and Bankruptcy:
Written by Craig D. Robins, Esq.
This post is part of a series of articles this week addressing every aspect you will need to know about bankruptcy and tax refunds.
The Issues to Consider in Determining If a Tax Refund is Protected in Bankruptcy Are:
1. Are you filing for Chapter 7 or Chapter 13?
2. Are you filing on your own or with your spouse?
3. Did you file your bankruptcy before December 31, or will you be filing in the new year?
4. Did you already get your tax refund?
5. Do you own a home that you are also trying to protect in the bankruptcy?
6. Do you have other liquid assets such as cash and money in the bank?
Tax Refunds in Chapter 7 Cases
Most of this blog post addresses tax refunds that you may receive if you are filing for Chapter 7 Bankruptcy. I will address tax refunds in Chapter 13 cases later in the week.
Do You Have a House?
New York has an unusual exemption scheme as it applies to protecting homes and protecting liquid assets. The way the law works, you can’t protect both. You have to choose: either protect the house with the New York homestead exemption or protect your liquid assets with the various liquid assets exemptions.
If you have a lot of equity in your home, then you will certainly want to use the New York homestead exemption. If you do, then you cannot use the liquid assets exemption, which means that you can’t protect the tax refund.
The New York Liquid Assets Exemption
In New York, each individual consumer who files for bankruptcy relief can protect certain assets: Bankruptcy Exemptions in New York . Each debtor can protect up to $2,500 of liquid assets. This includes:
– Cash
– Money in the Bank
– Entitlement to Tax Refunds
– U.S. Savings Bonds
Thus, if you have a total of $500 in the bank and in cash at the time you file your bankruptcy petition, you can protect the first $2,000 of a tax refund. That means that in close cases you have to look at the value of your liquid assets on the very day you file your petition.
Sometimes a trustee will require that you provide copies of bank account statements that indicate what your balance was on the date your petition was filed.
The $2,500 liquid assets exemption is per person and can be doubled if you are filing with a spouse, for a total of $5,000.
There is no distinction between Federal refunds and state refunds.
What Happens to a Joint Tax Refund If You File Bankruptcy Without Your Spouse?
In the State of New York, each spouse is entitled to one-half of the tax refund for bankruptcy purposes. Last year I wrote a detailed review of the law about this. See Who Owns the Tax Refund in a Bankruptcy Case: Trustee or Spouse? Apportioning the Refund of a Non-filing Spouse .
Here’s how a refund is allocated between debtor and non-filing spouse: Let’s suppose you file for bankruptcy and your spouse does not, and let’s assume that you can protect $2,000 of a tax refund because you have $500 in the bank (remember $2,500 is the total for liquid assets). What happens if the joint tax refund is $7,000?
Since each spouse is entitled to one-half of the refund for bankruptcy purposes, then your share is one-half of 7,000, which is $3,500. You can protect $2,000 of that, which means that you would have to turn over the unprotected part to the trustee, which is $1,500.
TIP: This means that if you expect a large refund, you will want to have as little in your bank account as possible on the date of filing.
Quick Links to All Tax Week Blog Posts About Tax Refunds and Bankruptcy:
Informative Article About Eliminating Taxes in Bankruptcy:
Article About Tax Consequences and Bankruptcy:
Written by Craig D. Robins, Esq.
What Happens to Your Tax Refund If You File for Bankruptcy in New York? Here’s the Complete Guide
Tax refunds can be several thousand dollars; so it’s worth learning how to protect and keep your refund if you file for bankruptcy.
Tax season starts the last month in January — which is when employers and financial institutions send out W-2 forms, 1099 forms, etc. It’s also when consumer tax payers start thinking about and preparing for filing their tax returns.
This week — all week long – I will post a number of helpful and informative articles on everything the consumer needs to know about filing bankruptcy and protecting tax refunds.
If you file for personal bankruptcy in New York, a tax refund that you have not yet received may be totally exempt and protected, or, based on your particular situation, it may only be partially protected, or not protected at all.
To learn whether your refund is protected, carefully read my blog posts this week. If you have questions or comments, please send them in. Keep in mind that the best way to ascertain whether a tax refund is protected in bankruptcy or not, is to seek the advice of an experienced New York bankruptcy attorney.
Quick Links to All Tax Week Blog Posts About Tax Refunds and Bankruptcy:
Informative Article About Eliminating Taxes in Bankruptcy:
Article About Tax Consequences and Bankruptcy:
Bankruptcy and the Elderly
Posted on
Written by Craig D. Robins, Esq.The economic times are tough for people of all ages, but senior citizens and the elderly are perhaps impacted the most. The weak economy is preventing many seniors from earning the income that they need to make ends meet.
I previously wrote that according to a report by AARP, the rate of personal bankruptcy filings for those ages 65 and older grew by 125 percent, while the bankruptcy rate of senior citizens ages 75 to 84 grew by an incredible jump of 433 percent.
I regularly see many senior citizens in my Long Island bankruptcy practice who are barely able to pay their bills. These seniors are often living on just pensions and Social Security, yet juggle soaring medical bills, credit card payments and rising food and gas costs. Some must deal with mortgage payments as well. See Many Long Island Seniors Suffering From Debt .
Many Seniors Are Not Financially Equipped to Handle Retirement
Several months ago I had the opportunity to talk with nationally-known author and economist Thomas J. Mackell, Jr., an expert on the economics of living in retirement. See my post: Former Federal Reserve Bank Chairman Points Out Disturbing News About Americans and their Pensions.
According to Mr. Mackell, our country’s retirement systems are insufficient to cover retirees’ financial responsibilities, and as a result, seniors load up on credit card debt and incur medical bills that they cannot afford to pay for.
The stock market, which fell during the past decade, also had the effect of eroding the value of pension plans and retirement accounts, making the situation for many seniors even bleaker.
Senior Citizens Should be Debt Free in Retirement
It’s very hard to retire on a fixed income when you owe a substantial amount of money. I’ve counseled many clients who are well past retirement age, and who are working just to pay their credit card bills.
Many seniors on Long Island are also coping with the high cost of living here. Fortunately, for many of them, I have been able to elinate all of their credit card debts, medical bills and other financial obligations.
Some Seniors Have Gambling Debt Which Can be Eliminated with Bankruptcy
Seniors, with lots of time on their hands, are often lured by free bus rides to the Casinos, where some have gambled away their hard-earned savings. It’s sad, but there are a lot of seniors who have incurred significant debt from gambling.
What seniors should know is that gambling debt is generally dischargeable in a Chapter 7 bankruptcy fling.
For Senior Citizens, Bankruptcy Is Often the Solution to Overwhelming Debt
A great number of seniors have been able to get a fresh new financial start by filing for Chapter 7 bankruptcy relief. This past August, I wrote about how Senior Citizens Are Filing Bankruptcy In Record Numbers .
My office regularly counsels and advises Long Island seniors about debt relief options including bankruptcy.
One particular aspect that we help senior overcome is that they are ashamed of their debts and financial situation – much more so than our younger bankruptcy clients.
However, when you file for bankruptcy, your debts disappear, the creditors stop calling, and your life returns to normal. Seniors need this relief more than most other segments of the population.
If you know of a senior with debt problems, consider recommending that they discuss their situation with an experienced bankruptcy lawyer.
Written by Craig D. Robins, Esq.Some clients ask if they have to be poor, penniless or destitute to file for bankruptcy. The answer is no.
Most of our Long Island bankruptcy clients actually have steady jobs and earn significant salaries. You do not have to be in the “poor house” to eliminate debts and get bankruptcy relief.
A good majority of our clients are working and earning typical salaries that employees on Long Island tend to earn. We started getting so many clients earning more than $100,000 per year that several months ago I wrote a blog post: If I Make Over $100,000 a Year, Can I Eliminate Credit Cards Debts in Bankruptcy?
Bankruptcy relief is available to anyone who is over-burdened by their debts and has difficulty paying them.
Although many of our clients have regular, steady jobs and are earning healthy salaries. they share key one point in common: dealing with their debts has become overwhelming. For many middle-class Long Island consumers, bankruptcy is the only realistic way out of a bad debt situation. See my post: Middle-Class Being Driven Into Bankruptcy by Recession According to Report .
When we meet with a client, we look at salaries and income to analyze them for determining eligibility under the means test . Seven out of eight people who we meet with qualify for eliminating all of their debts with Chapter 7 bankruptcy. Those who do not qualify for Chapter 7 bankruptcy can still seek relief under Chapter 13.
In these difficult financial times, many people are out of work. But, many others continue working, only to pay a great portion of their take-home income to pay their credit card debts. Whether you are working or unemployed, bankruptcy is an option for managing debt and getting a fresh new financial start.
The first step in tackling serious debt problems is meeting with a Long Island bankruptcy attorney.