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Chapter 7 Bankruptcy and The Means Test

Chapter 7 Bankruptcy Mankato MNThe means test was developed to ensure that the only people who file for Chapter 7 bankruptcy are those who truly do not have the ability to pay back their debts. There are many factors that go into the means test, so you should rely on an experienced Minnesota bankruptcy attorney to help you determine if you qualify for Chapter 7 bankruptcy.

The first factor the means test uses to qualify you for Chapter 7 is your income. Basically, if your income is less than the median income in Minnesota for the size of your household, and your debt is consumer debt and not business debt, you qualify for Chapter 7. There is no further test required. However, even if your income is above the median income for Minnesota, you may still qualify for Chapter 7.

Another factor the means test considers is your disposable income. Your disposable income is what is left over after you have paid for your allowed monthly expenses. If the money that is left over after expenses is not sufficient to make payments on your debts, you may qualify for Chapter 7, even if you income is above the median. Otherwise, you must file for Chapter 13, which means you will have to make one monthly payment each month to a chapter 13 trustee for a certain period of time (36 to 60 months) which gets split up among your creditors each month pursuant to the terms of a chapter 13 plan of reorganization. However, that is not necessarily bad news. Depending on your situation, Chapter 13 might be your best option.

The bankruptcy attorneys at Behm Law Group Ltd. deal exclusively in the area of bankruptcy law. Our highly trained and experienced staff can help you decide if Chapter 7 or Chapter 13 is best for your situation. When you are ready to put your debts behind you and move on with your life, give us a call.

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Going to Jail for Owing Money? Or, Bankruptcy?

There are not supposed to be debtor’s prisons in the United States. That’s what bankruptcy is for. However, debt collectors have found a legal dirty trick to send a debtor to jail. Though it doesn’t happen often, this is a technique they are using that you should know about, especially if you have succumbed to the allure of payday loans. This dirty trick is called a “body attachment.”

Body Attachment Defined

A body attachment, also called a “writ of bodily attachment,” is a type of court order that is usually used for people who are guilty of contempt of court. It is a lot like an arrest warrant. The rules for how a body attachment can be used depend on local laws. As an example, if someone is in contempt of court for missing a court date, a court can order a writ of bodily attachment. Once this order is issued, the court can authorize a sheriff to physically force a person to show up in court. Unfortunately, debt collectors have found a way to use body attachments to harass debtors.

Body Attachment Abused

A debt collector cannot threaten to throw a person in jail. However, debt collectors have been able to use body attachments to do just that. For example, they might get a judgment against a debtor. The collector can then summon the debtor to court. However, the debt collector will then summon the debtor to many, frequent hearings, or worse, they might even fail to notify the debtor of the hearing. As a result, the debtor misses their appointment, and the court issues a body attachment. The debtor then ends up in jail and often pays much more than he or she owes in bail money. If they don’t pay the bail money, they must sit in jail until the court date.

A Bankruptcy Filing Ends the Abuse

When you file for bankruptcy, debt collectors can no longer directly contact you. They must always go to your Minnesota bankruptcy attorney. In other words, when you hire a bankruptcy lawyer, you have an advocate to stand up for your rights. If you’re being harassed and abused by debt collectors, call the bankruptcy attorneys at Behm Law Group, Ltd. We’ll end their unwarranted abuse and work diligently to protect your legal rights.