Several common bankruptcy misconceptions prevent people from seeking the bankruptcy relief they so desperately need. Many of the clients I see in my office have waited much too long to seek bankruptcy help. While there is still time to help these individuals resolve their debt problems through bankruptcy, much of their fear, desperation, and frustration could have been avoided had they met with me earlier. Unfortunately, two closely related bankruptcy misconceptions keep individuals from contacting an experienced bankruptcy attorney sooner.
Bankruptcy Misconception Number 1:
Bankruptcy is only for poor people.
Contrary to what many people believe, bankruptcy is not only intended to help poor people get out of debt. The relief provided through bankruptcy is available to individuals and businesses from every income level. Examples of people and entities who have sought bankruptcy relief include:
- Legendary business people
- Movie stars
- Successful writers
- Mill workers
- Fast food restaurant employees
- Retail sales clerks
- Car salesman
- City governments
- Family-owned businesses
- Large corporations
- Utility companies
- Wealthy individuals
- Successful musicians
The only common element shared by every debtor who seeks the relief provided through the bankruptcy process is that the debtor cannot afford to pay his or her bills. The face of bankruptcy is not limited to a specific demographic or income level. Bankruptcy relief is available to everyone.
Bankruptcy Misconception Number 2:
I make too much money to file bankruptcy.
A closely related bankruptcy misconception is that someone makes too much money to file bankruptcy. This bankruptcy misconception is most likely rooted in the changes to the Bankruptcy Code in 2005. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) contained a new requirement for filing bankruptcy entitled the Means Test. When the Act was passed by Congress, few people fully understand exactly how the Means Test would affect bankruptcy filings. Many people panicked and incorrectly assumed that the Means Test would make it impossible for people to file for Chapter 7 bankruptcy.
Unfortunately, the media also played a role in spreading the bankruptcy misconception that BAPCPA had made it much more difficult to file a Chapter 7 bankruptcy and debtors would be forced to file under Chapter 13. This bankruptcy misconception has caused many people to struggle much longer than necessary before they seek the advice of an experienced bankruptcy lawyer.
What is the Bankruptcy Means Test?
The Means Test analyzes a person’s income for the six months prior to the filing of the bankruptcy case. The test takes into consideration the debtor’s monthly living expenses and the debtor’s obligation to support his or her dependents. You may hear that someone “failed the Means Test” so the person did not qualify for Chapter 7. While this may be true in some cases, it is not true in every case. There are circumstances in which a person will “fail the Means Test” and still qualify to file a Chapter 7 bankruptcy.
Calculating the Means Test can be complicated depending on the debtor’s financial situation; however, an experienced bankruptcy attorney knows how to use every exception and provision within the Bankruptcy Code to your advantage. If you are concerned that you make too much money to file bankruptcy, I urge you to contact my office for a free bankruptcy consultation. I will work diligently to find an affordable solution to your debt problems.
Contact an Experienced Mount Holly Bankruptcy Attorney
Personal Approach, Professional Service, Affordable Payment Plans
The Law Office of Travis J. Richards, LLC is a full-service Mount Holly bankruptcy law firm focused on Chapter 7 Bankruptcy, Chapter 13 Bankruptcy, debt consolidation, credit repair, tax liens, student loans, and foreclosure. We represent clients in Burlington County and throughout South Jersey.
Contact our office at 609-267-5297 to schedule your free consultation to discuss bankruptcy and non-bankruptcy alternatives. You may also use our convenient online contact form and one of our friendly, professional staff members will contact you to answer your bankruptcy questions and/or schedule a free consultation with Travis J. Richards.
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