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May 2013 Archives

What is the Chapter 7 Means Test?

In 2005, the Bankruptcy Code was amended. Part of the amendment included a formula to be used by the courts to determine if an individual is eligible to file a Chapter 7 case. This formula is referred to as the "means test." The purpose of the means test is to prevent people from abusing the bankruptcy process and discharging debt when they really can afford to pay their creditors. The means test formula is applicable to consumers who have personal debt (not business debt).  The formula is applied if the individual's income is greater than the state's median income for the applicable household size.  The debtor is also allowed numerous expenses to be deducted from his/her income.  Examples of expenses which can be deducted include standard of living expenses, some transportation costs, education expenses, and charitable contributions.  Once those deductions are made, the amount remaining is multiplied by 60.  If the leftover total is under $10,000 or over $6,000, and it also amounts to 25% or more of the debtor's non-priority unsecured debt, the court will designate the filing with a presumption of abuse. The above paragraph probably makes your head spin just reading it, but an experienced bankruptcy attorney can walk you through the means test step by step and help you understand how it applies to you. It is also important to note that if your income is below the state's median income or if you are a disabled veteran and the debt was incurred while you were on active duty, the means test is not applied to you. If you are considering filing a Chapter 7 bankruptcy, you should discuss the means test with an attorney at Levitt & Slafkes. If you are interested in learning more about Chapter 7 bankruptcy cases or the means test, contact Levitt & Slafkes, P.C. We are experienced in handling a variety of bankruptcy issues. Our offices are conveniently located in South Orange, New Jersey. Please call us at 973-323-2953 or online to schedule your free initial consultation.

What is the Chapter 7 Means Test?

In 2005, the Bankruptcy Code was amended. Part of the amendment included a formula to be used by the courts to determine if an individual is eligible to file a Chapter 7 case. This formula is referred to as the "means test." The purpose of the means test is to prevent people from abusing the bankruptcy process and discharging debt when they really can afford to pay their creditors. The means test formula is applicable to consumers who have personal debt (not business debt).  The formula is applied if the individual's income is greater than the state's median income for the applicable household size.  The debtor is also allowed numerous expenses to be deducted from his/her income.  Examples of expenses which can be deducted include standard of living expenses, some transportation costs, education expenses, and charitable contributions.  Once those deductions are made, the amount remaining is multiplied by 60.  If the leftover total is under $10,000 or over $6,000, and it also amounts to 25% or more of the debtor's non-priority unsecured debt, the court will designate the filing with a presumption of abuse. The above paragraph probably makes your head spin just reading it, but an experienced bankruptcy attorney can walk you through the means test step by step and help you understand how it applies to you. It is also important to note that if your income is below the state's median income or if you are a disabled veteran and the debt was incurred while you were on active duty, the means test is not applied to you. If you are considering filing a Chapter 7 bankruptcy, you should discuss the means test with an attorney at Levitt & Slafkes. If you are interested in learning more about Chapter 7 bankruptcy cases or the means test, contact Levitt & Slafkes, P.C. We are experienced in handling a variety of bankruptcy issues. Our offices are conveniently located in South Orange, New Jersey. Please call us at 973-323-2953 or online to schedule your free initial consultation.

Casey Anthony's Chapter 7 Bankruptcy

Casey Anthony filed a Chapter 7 bankruptcy case earlier this year. You probably recall that Ms. Anthony was charged with murdering her two year old daughter, Caylee. At first Anthony alleged that her daughter was kidnapped by her nanny, and then she changed her story saying Caylee accidentally drowned in a pool. After a jury found her not guilty on all charges except some misdemeanors, Anthony faced a barrage of lawsuits, including claims for defamation and for reimbursement by private investigators who searched for Caylee in the months before her remains were found. The litigation against Anthony came to a halt when she filed her Chapter 7 petition in Florida. Ms. Anthony listed few assets, but large amounts of unsecured debts including her legal fees of approximately $500,000. ABC News reports that Judge K. Rodney May heard from attorneys representing two people suing Anthony for defamation. The attorneys say that their suits should be exempt from the bankruptcy discharge; Anthony's attorneys say they should not. Judge May has not decided whether the defamation suits should be resolved in state court, or settled in the federal court system. He set the next court date for May 30, 2013.

Casey Anthony's Chapter 7 Bankruptcy

Casey Anthony filed a Chapter 7 bankruptcy case earlier this year. You probably recall that Ms. Anthony was charged with murdering her two year old daughter, Caylee. At first Anthony alleged that her daughter was kidnapped by her nanny, and then she changed her story saying Caylee accidentally drowned in a pool. After a jury found her not guilty on all charges except some misdemeanors, Anthony faced a barrage of lawsuits, including claims for defamation and for reimbursement by private investigators who searched for Caylee in the months before her remains were found. The litigation against Anthony came to a halt when she filed her Chapter 7 petition in Florida. Ms. Anthony listed few assets, but large amounts of unsecured debts including her legal fees of approximately $500,000. ABC News reports that Judge K. Rodney May heard from attorneys representing two people suing Anthony for defamation. The attorneys say that their suits should be exempt from the bankruptcy discharge; Anthony's attorneys say they should not. Judge May has not decided whether the defamation suits should be resolved in state court, or settled in the federal court system. He set the next court date for May 30, 2013.

Bankruptcy Dollar Amounts Increased April 1, 2013

Various dollar amounts in the Bankruptcy Code were increased for cases filed on or after April 1, 2013. As a result, several official bankruptcy forms have been revised to reflect the new dollar amounts, including the official Proof of Claim form, as well as a number of other commonly used bankruptcy forms. For more information about the newly revised official bankruptcy forms, go to: Many of the adjustments impact business debtors, but some affect consumers. For example, the debt limit for an individual to be able to qualify to file a Chapter 13 bankruptcy case will rise to $1,149,525 of secured debt, and certain exemption amounts will also rise. Both of these changes are beneficial to individuals seeking bankruptcy protection. Although the changes aren't substantial, be sure to keep them in mind for cases filed after April 1, 2013. To ensure that your bankruptcy case is properly filed following the most current requirements, contact Levitt & Slafkes today. If you are interested in learning how filing a bankruptcy case can benefit you, contact Levitt & Slafkes, PC, at 973-323-2953. You can also reach us by filling out our online form. We represent debtors in Chapter 7, Chapter 13 and Chapter 11 filings. Let us help you get the fresh financial start you need today.

Bankruptcy Dollar Amounts Increased April 1, 2013

Various dollar amounts in the Bankruptcy Code were increased for cases filed on or after April 1, 2013. As a result, several official bankruptcy forms have been revised to reflect the new dollar amounts, including the official Proof of Claim form, as well as a number of other commonly used bankruptcy forms. For more information about the newly revised official bankruptcy forms, go to: Many of the adjustments impact business debtors, but some affect consumers. For example, the debt limit for an individual to be able to qualify to file a Chapter 13 bankruptcy case will rise to $1,149,525 of secured debt, and certain exemption amounts will also rise. Both of these changes are beneficial to individuals seeking bankruptcy protection. Although the changes aren't substantial, be sure to keep them in mind for cases filed after April 1, 2013. To ensure that your bankruptcy case is properly filed following the most current requirements, contact Levitt & Slafkes today. If you are interested in learning how filing a bankruptcy case can benefit you, contact Levitt & Slafkes, PC, at 973-323-2953. You can also reach us by filling out our online form. We represent debtors in Chapter 7, Chapter 13 and Chapter 11 filings. Let us help you get the fresh financial start you need today.

Facing a New Jersey Foreclosure? You aren't alone.

Recent foreclosure statistics for New Jersey are alarming. While the rest of the country appears to be emerging from the recession in the housing market, foreclosures are still on the rise across New Jersey. CoreLogic shows the Garden State with the second highest foreclosure inventory. As of July 2012, 5.7% of mortgaged homes were in foreclosure (behind Florida with 11.2%). While Hurricane Sandy did not help matters, South Jersey was already experiencing negative housing market trends before the storm hit. Areas such as Vineland-Millville-Bridgeton have a high rate of mortgages that are severely delinquent. Areas such as Atlantic City-Hammonton MSA and Trenton-Ewing do too. According to RealtyTrac, the New York/Northern New Jersey area has a significant inventory of foreclosed properties. It is estimated it would take 97 months for the properties to be resold at the current pace. This is reported to be the biggest backlog in the nation. CoreLogic's report dated February 28, 2013, reveals that New Jersey is one of only four states where the foreclosure percentage rose over the past year, to 7.2 percent. If you live in New Jersey and you are facing a foreclosure, contact Levitt & Slafkes for help. Don't give up on your home! We have over 30 years of experience representing thousands of people who are at risk of losing their homes or business properties to foreclosure. There are a number of different options available to fight back against foreclosure and it is critical to choose the right one for your circumstances. During your free consultation, attorneys Bruce Levitt and Shelley Slafkes will carefully explain all of your options so you can make an informed decision about how to best  proceed. Contact us today at 973-323-2953 to schedule a free initial consultation with a compassionate and knowledgeable lawyer.

Facing a New Jersey Foreclosure? You aren't alone.

Recent foreclosure statistics for New Jersey are alarming. While the rest of the country appears to be emerging from the recession in the housing market, foreclosures are still on the rise across New Jersey. CoreLogic shows the Garden State with the second highest foreclosure inventory. As of July 2012, 5.7% of mortgaged homes were in foreclosure (behind Florida with 11.2%). While Hurricane Sandy did not help matters, South Jersey was already experiencing negative housing market trends before the storm hit. Areas such as Vineland-Millville-Bridgeton have a high rate of mortgages that are severely delinquent. Areas such as Atlantic City-Hammonton MSA and Trenton-Ewing do too. According to RealtyTrac, the New York/Northern New Jersey area has a significant inventory of foreclosed properties. It is estimated it would take 97 months for the properties to be resold at the current pace. This is reported to be the biggest backlog in the nation. CoreLogic's report dated February 28, 2013, reveals that New Jersey is one of only four states where the foreclosure percentage rose over the past year, to 7.2 percent. If you live in New Jersey and you are facing a foreclosure, contact Levitt & Slafkes for help. Don't give up on your home! We have over 30 years of experience representing thousands of people who are at risk of losing their homes or business properties to foreclosure. There are a number of different options available to fight back against foreclosure and it is critical to choose the right one for your circumstances. During your free consultation, attorneys Bruce Levitt and Shelley Slafkes will carefully explain all of your options so you can make an informed decision about how to best  proceed. Contact us today at 973-323-2953 to schedule a free initial consultation with a compassionate and knowledgeable lawyer.

Can You Pay Student Loan Debt With Your Credit Card & Discharge It in bankruptcy?

We have seen recent discussions regarding whether a recent graduate can pay his or her student loan with a credit card, then file for bankruptcy and discharge the debt as an unsecured credit card debt. While this strategy may seem like a good plan for circumventing the bankruptcy rules, below are 2 main reasons why it is a bad idea:

Can You Pay Student Loan Debt With Your Credit Card & Discharge It in bankruptcy?

We have seen recent discussions regarding whether a recent graduate can pay his or her student loan with a credit card, then file for bankruptcy and discharge the debt as an unsecured credit card debt. While this strategy may seem like a good plan for circumventing the bankruptcy rules, below are 2 main reasons why it is a bad idea:

Shelley Slafkes & Bruce Levitt - Speakers at Recent Bankruptcy Seminar

On April 16, 2013, Shelley Slafkes and Bruce Levitt were speakers at a live Continuing Legal Education (CLE) Seminar titled "Consumer Bankruptcy 101: Adding Chapter 7 & 13 Bankruptcy to Your Practice." As premier bankruptcy attorneys, Shelley and Bruce gave advice and tips to other attorneys on how to be successful in their Chapter 7 and Chapter 13 practice.

Shelley Slafkes & Bruce Levitt - Speakers at Recent Bankruptcy Seminar

On April 16, 2013, Shelley Slafkes and Bruce Levitt were speakers at a live Continuing Legal Education (CLE) Seminar titled "Consumer Bankruptcy 101: Adding Chapter 7 & 13 Bankruptcy to Your Practice." As premier bankruptcy attorneys, Shelley and Bruce gave advice and tips to other attorneys on how to be successful in their Chapter 7 and Chapter 13 practice.

Doctors Filing Bankruptcy in New Jersey

According to a recent MoneyCNN.com article, many doctors are being pushed into filing for bankruptcy protection. While many physicians are able to keep their practice going after their bankruptcy filing, for some it ends their career. According to the article , it is unfortunately,  a trend that has accelerated in recent years and it poses serious consequences for the doctors and their patients. You might speculate that the doctors seeking bankruptcy protection are those that have malpractice lawsuits pending against them, but this isn't the case. The decline in the economy is negatively impacting even the top quality physicians. Consumers are cutting back on their office visits and postponing elective procedures. Other factors that are hurting the medical field are lower insurance reimbursements, changing regulations and the increasing expense of malpractice insurance. Add these rising expenses to the already costly necessities of running a business, and it is easy to see why it is getting harder to keep the doors of a medical practice open. If you are a physician or other medical professional facing financial struggles, it may be time to consider filing a bankruptcy case. The quicker you take action to restructure your debt, the more likely you are to emerge from your case successfully and obtain the fresh start you need. We are bankruptcy lawyers who know how to make a difference in your financial situation. We have experience you can rely on and we care about your results. Contact our New Jersey law firm online by filling out the form or by calling 973-323-2953 to schedule a free initial consultation.

Doctors Filing Bankruptcy in New Jersey

According to a recent MoneyCNN.com article, many doctors are being pushed into filing for bankruptcy protection. While many physicians are able to keep their practice going after their bankruptcy filing, for some it ends their career. According to the article , it is unfortunately,  a trend that has accelerated in recent years and it poses serious consequences for the doctors and their patients. You might speculate that the doctors seeking bankruptcy protection are those that have malpractice lawsuits pending against them, but this isn't the case. The decline in the economy is negatively impacting even the top quality physicians. Consumers are cutting back on their office visits and postponing elective procedures. Other factors that are hurting the medical field are lower insurance reimbursements, changing regulations and the increasing expense of malpractice insurance. Add these rising expenses to the already costly necessities of running a business, and it is easy to see why it is getting harder to keep the doors of a medical practice open. If you are a physician or other medical professional facing financial struggles, it may be time to consider filing a bankruptcy case. The quicker you take action to restructure your debt, the more likely you are to emerge from your case successfully and obtain the fresh start you need. We are bankruptcy lawyers who know how to make a difference in your financial situation. We have experience you can rely on and we care about your results. Contact our New Jersey law firm online by filling out the form or by calling 973-323-2953 to schedule a free initial consultation.

Discharging Business Debt

If you are a small business owner facing financial struggles, it is likely you have incurred a significant amount of personal debt trying to keep your business afloat. It is important to seek the advice of competent bankruptcy counsel to discuss the possibility of eliminating the business-related debt you incurred personally. It is common for small business owners to sign personal guarantees, obtain loans, use personal credit cards and even borrow from their own savings account to fund the business.  As a result, the business owner can incur a significant amount of personal debt. If you are concerned how your personal bankruptcy case will affect your company, it depends on the type of business you own. If your entity is legally incorporated, it is not required to file its own bankruptcy case. However, a business owner who files bankruptcy must list his interest in the business as an asset in his filing. Very often the business is not affected by the bankruptcy, but it is imperative that you consult with an experienced  bankruptcy lawyer to make sure your business will not be affected by a personal bankruptcy.. If you own a small business and you are considering filing a bankruptcy, contact Levitt & Slafkes, P.C., to obtain advice you can depend upon.

Discharging Business Debt

If you are a small business owner facing financial struggles, it is likely you have incurred a significant amount of personal debt trying to keep your business afloat. It is important to seek the advice of competent bankruptcy counsel to discuss the possibility of eliminating the business-related debt you incurred personally. It is common for small business owners to sign personal guarantees, obtain loans, use personal credit cards and even borrow from their own savings account to fund the business.  As a result, the business owner can incur a significant amount of personal debt. If you are concerned how your personal bankruptcy case will affect your company, it depends on the type of business you own. If your entity is legally incorporated, it is not required to file its own bankruptcy case. However, a business owner who files bankruptcy must list his interest in the business as an asset in his filing. Very often the business is not affected by the bankruptcy, but it is imperative that you consult with an experienced  bankruptcy lawyer to make sure your business will not be affected by a personal bankruptcy.. If you own a small business and you are considering filing a bankruptcy, contact Levitt & Slafkes, P.C., to obtain advice you can depend upon.

Bankruptcy Meeting of Creditors

All bankruptcy debtors are required by the Bankruptcy Codeto attend the meeting of creditors (also called the 341 meeting); yet in most cases, it is a very quick and painless process.. Usually the meeting does not last very long and it is fairly casual. First of all, although they are invited, creditors rarely attend the meeting, and you will not be before a judge, although you are under oath.  Rather you will meet with the bankruptcy Trustee who is  an individual appointed to administer the bankruptcy.  The debtor answers question under oath about their bankruptcy and the information in their petition.

Bankruptcy Meeting of Creditors

All bankruptcy debtors are required by the Bankruptcy Codeto attend the meeting of creditors (also called the 341 meeting); yet in most cases, it is a very quick and painless process.. Usually the meeting does not last very long and it is fairly casual. First of all, although they are invited, creditors rarely attend the meeting, and you will not be before a judge, although you are under oath.  Rather you will meet with the bankruptcy Trustee who is  an individual appointed to administer the bankruptcy.  The debtor answers question under oath about their bankruptcy and the information in their petition.

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