Here’s another reason why many debtors filing for Chapter 7 bankruptcy without the help of a bankruptcy attorney find themselves in a heap of financial trouble. Most debtors who are married but filing alone don’t understand that they will be required to use a means test form to determine their eligibility for Chapter 7 bankruptcy; but that particular form might unlawfully disqualify them from Chapter 7 bankruptcy. The problem is that the form required for the Chapter 7 bankruptcy means test includes all of the non-debtor spouse’s income when comparing the monthly income to the median income without making any allowances for expenses that non-debtor spouse may be solely responsible for such as; child support, taxes etc. Because of this, the Chapter 7 bankruptcy means test calculation might give a false indication of what the debtor spouse’s true monthly income is when filing for Chapter 7 bankruptcy. With the help of a bankruptcy attorney, a married debtor filing for Chapter 7 bankruptcy alone can advocate to a bankruptcy court to take this discrepancy into consideration. In such a situation a bankruptcy attorney may even ask that a debtor spouse be allowed to use the Chapter 13 bankruptcy means test instead of the Chapter 7 bankruptcy means test to make sure the debtor is treated fairly.

If a debtor is filing Chapter 7 bankruptcy he/she may be required to take an income/means test to determine if they meet the income qualifications for filing for Chapter 7 bankruptcy. When it comes to the income/means test, many debtors mistakenly believe that they don’t need to report side income from a part-time job or business. The truth is that all income for the six months preceding the filing of a Chapter 7 bankruptcy must be reported to the bankruptcy court. Even if the income is not from a job, it is still considered income and must be accurately reported.

For example, if you sell homemade cookies and receive $200 in extra income a month, that money must be reported to the bankruptcy court as income. Even if it was as little as $20 a month, you must report it as income.

Another example…if you filed for bankruptcy in February; but worked a Xmas job for November and December, this income would need to be reported. Although your bankruptcy attorney might be able to argue that it should not be counted in calculating your median income because it was only a 2 month job, that argument may most likely require you and your attorney to appear before the bankruptcy judge.

If you are considering Chapter 7 bankruptcy and have several sources of income, including small side jobs or a part-time business, speak with a bankruptcy attorney to find out how this will affect your ability to pass the income/means test required for filing Chapter 7 bankruptcy.

In Dallas-Fort Worth Texas a debtor filing for Chapter 7 bankruptcy may have to take a means test which looks at the debtor’s average income over the 6 month period preceding the month of bankruptcy filing. In Texas, a single debtor filing for Chapter 7 bankruptcy must not make more than $3,093 per month or $18,560 over the past six months before filing for bankruptcy if he/she wants to avoid taking the means test. This figure is for a household of one person, those figures change as the household gets larger. This income includes all taxable income regardless of your expenses. So, even if a debtor has a mortgage of $4,000 per month and other expenses if they make over the $3,093 per month income threshold, they will need to take the means test. The means test is a measure used to see if a debtor can file Chapter 7 bankruptcy without it being an abuse of the system.

If a debtor finds that they don’t quite meet the income requirement when filing for Chapter 7 bankruptcy, it may be advisable to wait a few months if you expect your income to decrease. The bankruptcy court will only look at the last 6 months of income before you filed for Chapter 7 bankruptcy.

When filing for chapter 7 bankruptcy, many debtors find that money is so limited that they cannot afford the bankruptcy filing fee. If a debtor filing for Chapter 7 bankruptcy is in this situation, he/she may be able to have the bankruptcy filing fee waived. A provision of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) allows the bankruptcy court to waive the bankruptcy filing fee for individual debtors if the debtor’s income is less than 150% of the poverty line in their state of residence. Some debtors whose income is above this limit may be able to pay a reduced bankruptcy filing fee. When a debtor files for Chapter 7 bankruptcy he/she must submit the petition with an application for this "fee waiver" program. Filing for this waiver shouldn’t delay the bankruptcy procedures because according to the bankruptcy law, the court is required to process the bankruptcy the same way it would if the debtor was paying the filing fee.

If you’re filing for Chapter 7 bankruptcy and can’t afford the fee speak with your bankruptcy attorney immediately about this "fee waiver" program. You may also have access to other fee waivers throughout the bankruptcy process, depending on your income.

When filing for Bankruptcy with an outstanding car loan you may want to consider reaffirming the debt with the lender. When you reaffirm the car loan you agree that you will be responsible for the car loan debt despite filing for Chapter 7 bankruptcy. In other words, even after filing for bankruptcy you will need to pay your car loan and the lender agrees to not repossess the car as long as your payments are in compliance with the agreement. The only problem with reaffirmation is that if you fall behind on your car payments after your bankruptcy is discharged, lender can repossess the car and sue you for the balance of loan. Most likely the lender will try to sell the car at auction; but if the proceeds of the auction is not enough to cover the car loan balance the creditor will attempt to recover the losses by suing you. It is important to note that many people still owe a loan balance even after the vehicle is sold because they are upside down on their loan. Discuss any affirmation agreement you are considering with your Dallas-Fort Worth bankruptcy attorney.

In a Chapter 7 bankruptcy most credit card debt will be forgiven; but there are occasions when a judge will require a debtor to repay the lender, yes even in Chapter 7 bankruptcy. The most common way a lender is able to force a debtor filing for Chapter 7 bankruptcy to repay credit card charges is if the debtor committed fraud. In other words, if you charge up a credit card without having some intention of eventually repaying it, that is considered fraud. If the creditor accuses the debtor filing for Chapter 7 bankruptcy of fraud, a judge will examine the case for signs of fraud. The most common sign of fraud found in a Chapter 7 bankruptcy case is incurring credit card charges after first consulting with a Chapter 7 bankruptcy lawyer. Even worst than that, paying for the Chapter 7 bankruptcy fees and expenses with your credit card. But we all know better than that. Right? But even if your credit card purchases were made months before filing Chapter 7 bankruptcy you could still be found guilty of fraud. For example, if you bought furniture 8 months before filing Chapter 7 bankruptcy and never made any attempt to make a payment you could be found guilty of fraud by the bankruptcy judge.

To avoid having your Chapter 7 bankruptcy complicated or even denied due to fraud, it’s best to avoid any use of your credit card once you begin considering Chapter 7 bankruptcy.

Chapter 7 is a common form of bankruptcy case that most debtors have been filing. A filing under chapter 7 is called liquidation. It is a kind of liquidation proceeding in which the debtor is allowed to keep aside exempt property and a trustee appointed by the court takes over the debtor’s non-exempt assets, sells them and pays off the creditors through the sale proceeds. In Texas, you also have the choice of using the federal exemption statutes instead of your Texas exemptions.

If you are planning to file for bankruptcy under Chapter 7 to delay foreclosure, it can buy you 45 to 75 days. It will temporarily delay foreclosure while the Bankruptcy Court works out the details.

To qualify for relief under Chapter 7 of the Bankruptcy Code, the debtor must be an individual, a partnership, or a corporation.

In a Chapter 7 proceedings a discharge is available to individual debtors only, not to partnerships or corporations. Although the filing of an individual Chapter 7 petition generally results in a discharge of debts, an individual’s right to a discharge is not absolute, and some types of debts are not discharged. Moreover, a bankruptcy discharge does not extinguish a lien on property. In other words, a creditor will retain its rights to collateral securing a debtor’s obligation.