Filing Chapter 7 Bankruptcy In Nebraska
Most people who file bankruptcy, file Chapter 7 Bankruptcy. Chapter 7 Bankruptcy is available for corporations, partnerships, individuals and couples. It is the quickest, easiest and least expensive type of bankruptcy. Chapter 7 Bankruptcy will allow you to discharge most of your unsecure debt.
The first step in the bankruptcy process is to contact a Nebraska Bankruptcy Lawyer. Your bankruptcy attorney will determine if you qualify for Chapter 7 or Chapter 13 Bankruptcy. If you can file chapter 7 Bankruptcy, your Nebraska Bankruptcy Attorney will submit you bankruptcy petition and a statement of financial affairs to the appropriate Nebraska bankruptcy court. The bankruptcy documents will outline all of your debts, the names of the creditors, the amount you owe, a list of your property and all of your expenses and income. A trustee will be assigned to sell all of your non-exempt assets and use the money from the sale to pay your creditors. Creditors will be paid based on their priority, which is outlined in federal bankruptcy law.
After the bankruptcy petition is filed, there will be an “automatic stay” and all debt collection efforts will be temporarily postponed until the bankruptcy judge determines there is “cause” to continue. After a four to six month period, most of your dischargeable debt including: hospital bills, credit card balances and unsecured personal loans will be discharged.
In 2005, the Bankruptcy Abuse Prevention and Consumer Act (BAPCA) passed which made it more difficult for many people to file Chapter 7 Bankruptcy. The goal of the legislation was to require more people to file Chapter 13 Bankruptcy and repay all or a portion of their debt.
The main provisions of the BAPCA includes completing credit counseling prior to filing bankruptcy, completing a financial management course prior to the discharge of your debt, and passing an income test to qualify to file Chapter 7 Bankruptcy.
The income test determines if your average monthly gross income is below the average monthly gross income for other Nebraska families of similar size. If you income is less then other Nebraska residents, you most likely will be able to file Chapter 7 Bankruptcy. If you income is above the average monthly gross income compared to other Nebraska residents, you will have to complete additional means testing.
Additional means testing will review your income minus pre-determined expenses such as your house payment, your car payment, child support payments, taxes owed, and school tuition (up to $1650). If you have a disposable income which will allow you to pay $6,000 or 100 per month toward your debt over the next sixty months, you may have to file Chapter 13 Bankruptcy. If you can not pay that much, but you could pay up to 25% of your disposable income toward your unsecured debt over the next sixty months, you may have to file Chapter 13 Bankruptcy.
State median data is provided by the United States Trustee Program. For the State of Nebraska, after March 15, 2009, the median income for a single wage earner in the state of Nebraska was $37,803 and for a family of two it was $53,453. For a family of three it was $62,814 and for a family of four it was $72,179.
The information provided above is very general and should not be considered legal advice. Means testing can be very complicated. It is important to contact a Nebraska Bankruptcy Attorney to determine if you can qualify to file Chapter 7 Bankruptcy.
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