When you’re looking to file for personal bankruptcy protection, there are generally two options—a Chapter 7 liquidation proceeding and a Chapter 13 “Wage Earner’s Plan.” For most of the history of American bankruptcy law, there were few limits on which route you could choose. However, in 2005, Congress made sweeping changes to the bankruptcy laws, making it much more difficult for a personal debtor to permanently discharge debts. Under those revisions, you must now submit to a “means test,” essentially designed to determine whether you have the resources to pay your creditors off over a specific period of time. If so, then you will be prohibited from filing a Chapter 7 petition.
Here’s how the test works:
Contact our office online or call us at 856-424-6400. Evening and weekend meetings can be arranged upon request. We accept all major credit cards.
Named a New Jersey Super Lawyer Every Year Since 2010
How Long Will a Bankruptcy Affect Your Credit? Will It Ever Drop Off Your Credit Report? For many, one of the biggest fears associated with bankruptcy is the perception that it will permanently destroy your credit, that you’ll never be able to get a loan or...
Read MoreDoes the Automatic Stay Mean You Don’t Have to Pay Your Debts? When you file for personal bankruptcy, whether you’re seeking to permanently discharge debts in Chapter 7 or want to set up new payment arrangements through Chapter 13, the automatic stay imme...
Read More