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Why the Chapter 7 Means Test Is Harder on Large Families and How to Fight Back

Big family

Large families have a harder time with the bankruptcy means test

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The bankruptcy reform that was pushed through back in 2005 was intended to keep people from taking advantage of the system. Instead, what has happened is that many people that legitimately need the financial assistance that bankruptcy provides are blocked from getting help. This is particularly true when it comes to larger families who may struggle to pass the bankruptcy means test even though they truly are cash-strapped and can't service their debts. If you've got a big family, here's how you can fight back to get the financial relief you deserve.

Small Business Owners: Is Biz or Personal Bankruptcy Better for You?

Business closing

Facing a business closure? What type of bankruptcy will protect you best?

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If you own a small business, are drowning in business bills and are desperate for a financial fresh start, you may think filing business bankruptcy is the best option for you. In fact, it may not be at all. Instead, you may be better off filing a personal bankruptcy instead. This is definitely true if you own a sole proprietorship that you haven't bothered to incorporate, but what if you have incorporated as an LLC or sub-S corporation to make your business “official”? The good news is that personal bankruptcy can still work if you take a couple of extra steps.

Can You Surrender Your Car After Bankruptcy If You Don't Want It or Can't Afford It?

Should you keep your car?

What happens if you want to give up your car after bankrutpcy?

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If you have a car with a loan and you're completely current on the monthly payments, it's very likely that you can keep it. But what happens if you file bankruptcy, keep the car but then decide you can't afford it, it breaks down or you lose your job and can't pay the bill? If any circumstance makes it so that you can't keep or don't want the car anymore and you're still making payments, you can still enjoy some of the protections of bankruptcy, even if you've already filed.

Can You Be Refused Medical Care After Bankruptcy If You Didn't Pay Your Doctor Bills?

Medical care

Can filing bankruptcy when you owe medical bills impact your health care?

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Unaffordable medical bills are one of the leading causes of bankruptcy in America. If you've got a pile of unpaid doctor and hospital bills that you can't afford, Chapter 7 will wipe them out – this is one type of unsecured bill that can be easily taken care of in bankruptcy. This can offer you instant peace of mind, but you may worry that a doctor, hospital or other medical practice can turn you away after you file bankruptcy. Here's what you need to know.

What to Do If You're Being Harassed by Debt Collectors After Filing Bankruptcy

Past due bill

Debt collectors should stop pursuing you for past due bills once you file bankruptcy

If you've filed bankruptcy to get debt relief, your creditors are bound by law not to continue trying to collect the debt during the automatic stay. If you file a Chapter 7 bankruptcy, you generally should not hear from any of your creditors whose debts will be discharged (credit cards, medical bills and other unsecured debts). Because these debts are no longer active as of the filing, they shouldn't ever contact you again. For a Chapter 13, there's an automatic stay that should keep creditors off your back until you get your repayment plan in place.

What Assets of Yours Can a Creditor Garnish If You're Not Paying Your Bills?

Financial information

Which assets are at risk for garnishment?

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One of the nice things about living in North Carolina is that creditors generally cannot garnish your wages to try and collect past due bills. The IRS and North Carolina income tax authority can garnish your wages and your wages can also be garnished for child support and alimony if you're behind on payments. Also, up to 25% of your wages can be garnished for federal student loans. In North Carolina, many ambulance companies can also seize your wages.

Beware Debt Settlement Companies Offering Miracle Results Says Attorney Edward Boltz

Ed Boltzi

Bankruptcy attorney Edward Boltz

We've written here in multiple articles about the dangerous and misleading promises made by debt settlement companies. The ads sound great – they promise to get you out of debt for drastically less than you owe and imply that they have some sort of extraordinary negotiating power to deal with creditors. Nothing could be further from the truth. They charge sizable fees and this would be less of an issue if the debt relief they achieved more than made up for it, but this is simply not the case.

Self Employed? You'll Need Some Extra Information to File Bankruptcy with Best Results


Self-employed people have special bankruptcy concerns

If you work for yourself either as an entrepreneur, sole proprietor, freelancer or any other arrangements where you're not drawing a standard paycheck from an employer that withholds taxes, you'll need to do a little more prep work before you file bankruptcy. When self-employed consumers come in to talk to us about debt relief, the first thing we have to assess what your income, debts and assets are. For those who work for an employer, they bring in recent paystubs, bank statements and copies of bills. But for those that are self-employed, there is a little more to it.

Should You File Bankruptcy After a Foreclosure in North Carolina?

Foreclosed house

Should bankruptcy follow foreclosure?

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If you're facing a foreclosure in North Carolina, you may be considering filing bankruptcy to buy you some additional time in the home. A Chapter 13 can allow you time to get caught up on payments and a Chapter 7 can buy you a temporary stay of three to twelve months to stay put and save up to move. But what happens if you don't want to stall the foreclosure and just let it go ahead and happen? Do you still need bankruptcy protection? Maybe. Here's why.

Money Matters: How You Can Ditch Most of Your Old Debts Without Bankruptcy

Money matters

Advice on using your money wisely

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If you're way behind on your debts, this is bad news. However, if you have been unable to pay your debts for a number of years, there may be a silver lining to look forward to. Most people think that the only way to get debts written off or discharged is to file bankruptcy, but you may be closer to debt relief than you think without taking this drastic step. Let's explore when and how certain debts can be relieved.

How Chapter 7 Can Stop a Foreclosure More Cheaply Than a Chapter 13 Depending on Your Goals


Stop foreclosure more affordably with a Chapter 7

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If you're trying to stop a foreclosure on your home, a Chapter 7 may work as well as a Chapter 13 and help you accomplish your goals more inexpensively, depending on what your ultimate goals are. If you've got equity in your home and have fallen behind on your payments, it makes sense to try and hang on to your house. Chapter 13 will give you three to five years to catch up on those back payments and makes sense if you can afford to keep up the payments.

5 Ways Your Choice of Attorney Can Impact the Outcome of Your Bankruptcy Case

Number Five

Five ways your choice of attorney can impact your bankruptcy case

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Some bankruptcy attorneys operate a volume operation where they churn through as many people as possible without a lot of regard for them as individuals. Sure, this is a profitable business model, but it's not an ethical one. And it's not one that we buy into. You can take the same information to two or three different bankruptcy attorneys and get three different (and likely conflicting) sets of advice. That's confusing to bankruptcy filers that do compare attorneys. And those that start out with an attorney that doesn't offer highly personalized service will likely not get the best results.

How to File Chapter 7 Bankruptcy Even If You're Earning a Higher Than Median Income for NC

Big money

High income earners may still be eligible for Chapter 7 bankruptcy

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As of last year, the median income for North Carolina was $40,736 for a single earner, $51,662 for a two person home, $55,049 for three people and $66,147 for four people. Above four, you add $8,100 for each person in the household. If you're earning above these limits, you may think that you can't file Chapter 7, but that's not true. First, your income over the last six months is what's considered. If you were making good money but it's declined in recent months, you'll have an easier time proving to the court that you're not trying to abuse the bankruptcy system.

Why Chapter 7 Is Almost Always Better for You – Even If You're Trying to Stop Foreclosure

There is always a choice

Why Chapter 7 is usually a better choice to get a financial fresh start

Image source: Flickr Creative Commons User Alan Levine

In the Middle District of North Carolina, more bankruptcy filers choose Chapter 13 than Chapter 7 – it's opted for 20% more than the full discharge plan. But is this the best option for the majority of bankruptcy filers? Chapter 13 can be very useful to get a reprieve for those drowning in student loans and to get second mortgages stripped away when there's not enough equity to support them. But, as we wrote recently, Chapter 13s are more likely to not be seen all the way through to discharge. For many people, a Chapter 13, even if it doesn't last until discharge, serves a purpose.

When Can You Get Back Income Taxes Written Off in Bankruptcy and When Are They Unavoidable?

Income taxes

Income taxes can be forgiven in bankruptcy sometimes

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Income taxes are a type of debt and, if they go unpaid, can be the most difficult type of debt to get out from under besides student loans. There are only a couple of ways to get out of paying tax debt – wait out the government's typical collection period or request that they be discharged in bankruptcy. Back taxes alone aren't a good reason to file bankruptcy, but if you have other unsecured debts like medical bills and credit card debt that are piled up, past due and that you don't have the means to repay, it's definitely something to consider.

How North Carolina's Stingy Unemployment Compensation Could Force You Into Bankruptcy

North Carolina Senate

North Carolina lawmakers cuts to unemployment are crushing consumers

Image source: Flickr Creative Commons User Government & Heritage Library of NC

North Carolina's legislators have added insult to the injury of unemployment by severely slashing UI compensation to the jobless. This time last year, the state cut the maximum weekly benefit from $535 down to $350 and then cut the number of weeks you could receive payments from 26 down to 20. And based on the law, as of July 1, the payout term for unemployment maxes out at just 14 weeks. This leaves NC with the worst unemployment compensation in the country.

Why Chapter 13 Bankruptcies Sometimes Don't Work Out and How to Make Sure Yours Does

Tight fit

Chapter 13 repayment plans can be a tight fit on your budget

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The Midwestern Bankruptcy Institute conducted a study on Chapter 13 bankruptcies to examine how many filings succeeded, how many didn't make it to completion and what drove either the success or failure to make it all the way through. According to data in the study, one in three Chapter 13 bankruptcy filings makes it all the way to discharge. But even knowing that two-thirds of debtors don't complete the process doesn't necessarily mean that those filings didn't meet the debtor's financial needs. They may have served their purpose without completion, so it's not fair to label them failures.

Fun Facts From History: Did You Know Three Presidents Have Filed Bankruptcy?

Thomas Jefferson

Did you know Thomas Jefferson filed bankruptcy more than once?

Image source: Flickr Creative Commons User Marion Doss

For those struggling with debt, it can feel overwhelming, embarrassing and frustrating. It can depress you to the point where your health suffers. You may think that insolvency means you've done something wrong or have failed in some way. But this is simply not true. Most bankruptcy filers end up deep in debt because of a major life event like a divorce, major accident, significant illness or prolonged unemployment. And, you probably don't know this, but three US presidents have looked to bankruptcy to get them out of debt – and those are leaders of the free world!

What's Your Debt? The Top 5 Reasons People File Personal Bankruptcy Revealed


What are the top 5 reasons people file bankruptcy?

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While here in North Carolina, bankruptcy filings overall have declined as the recession has eased, there are still many people struggling financially in our state and around the country. If you're deep in debt and having problems keeping up with your bills, you're not alone. It can be easy to feel like you're the only one with money woes but, in fact, you're not and you'd be surprised how many of your friends, neighbors and co-workers are also in debt and hiding it because they're also embarrassed. If your debts are just too much to manage, filing bankruptcy may be a viable solution. Today, we'll discuss the top five reasons consumers just like you choose bankruptcy to get out of debt.

When and Why You Should Convert a Chapter 13 Bankruptcy Petition to a Chapter 7

Change is good

Changing from a Chapter 13 to a Chapter 7 is possible and can be beneficial

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Chapter 13 and Chapter 7 bankruptcies differ substantially. In a Chapter 7, you have most of your unsecured debts discharged and if you have secured debts you are behind on, the property can be relinquished and that debt wiped out as well. By contrast, a Chapter 13 buys you time to catch up on your bills, usually a mortgage, car loan and other secured debts, and will pay some of your unsecured debts and wipe out remaining balances on others after you complete your repayment plan.


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