Rolsma Law Firm S.C.

Exemption of National Guard and Reservists from Bankruptcy Means Test is Extended

Carl Rolsma — Thu, 16 Feb 2012 15:42:14 +0000

Less than a week before the National Guard and Reservists Debt Relief Act of 2008 was set to expire, the president signed into law a 4 year extension of the act. This law exempts qualifying Armed Forces reserve component and National Guard members (who, after September 11, 2001, are called to active duty or to perform a homeland defense activity for at least 90 days, and remain eligible for an exemption during the 540-day period following such active duty or homeland defense activity service) from the application of the means-test presumption of abuse under chapter 7 (Liquidation) of the Bankruptcy Code. In other words, those who qualify, and who would have been forced into a Chapter 13 payment plan because their income was too high, will be able to obtain relief under Chapter 7. The deadline will now be extended into December of 2015. This could be a great help to the families of the many men and women in the Janesville area who are serving in the National Guard and Reserves.

New Means Test Income Limits Are a Mixed Bag

Carl Rolsma — Tue, 06 Dec 2011 17:01:06 +0000

For individuals filing for bankruptcy, the news is good. For multiple member households, not so good. In order to file for a Chapter 7 bankruptcy, a debtor must have income over the past 6 months that is lower than the median family income for his state. If the debtor’s income is higher than that, the debtor will not be allowed to file under Chapter 7, and most debtors will then be required to file under Chapter 13. Chapter 13 requires that the debtor submit a plan to repay some or all of his debts over 3 to 5 years. For many debtors, Chapter 7 is preferable because it usually results in most or all of the debts being discharged in about 4 months. The official Median Income levels are published by the U.S. Trustee’s Office of the Department of Justice. The most recent changes went into effect on Nov. 1, 2011, and the new numbers are higher for individuals and lower for multiple member households. This will make it easier for individuals to qualify for a Chapter 7 bankruptcy but more difficult for multiple member households. For an individual, the cutoff is $41,880 in annual income. For a family of 4, it is $76,117. The irony is that the current economic slump results in a greater need for bankruptcy relief for families. But, that same economic slump lowered the median income, thereby making it harder to obtain relief. If you think that you do not qualify for a Chapter 7 under the Means Test, you should still consult a bankruptcy attorney. There are exceptions to the Means Test. For example, if most of your debt is related to a failed business venture, then the Means Test restrictions will not apply to you. For a full evaluation of your situation, call us, or fill out our online bankruptcy evaluation form.

Bankruptcy Counseling For Those With Advanced Degrees Increasing

Carl Rolsma — Fri, 11 Nov 2011 17:28:15 +0000

The percentage of debtors with advanced degrees obtaining pre-bankruptcy financial counseling has increased from 4.9% in 2006 to 6.7% in 2010. Also, those earning over $50,000 had the greatest increase compared to those at other income levels. This according to a study by the Institute for Financial Literacy and reported by the National Association of Consumer Bankruptcy Attorneys. The question is, “Why?” The Institute’s executive director thinks that falling home values and white collar job losses are contributing factors. Information we have received also points to the fact that people with high incomes tend to live in areas with a high cost of living. As a result, when high income earners lose their jobs, their higher expenses cause finances to spin out of control more quickly than it might for lower income earners.

Bankruptcy Filing Fees to Increase on Nov. 1

Carl Rolsma — Sat, 24 Sep 2011 21:49:54 +0000

Filing fees that are paid to the Bankruptcy Court at the time of filing a Bankruptcy Petition are going up by $7 for all chapters as of November 1, 2011. That means that the fee for a Chapter 7 case will go up from $299 to $306, and the filing fee for a Chapter 13 case will go up from $274 to $281. Plan accordingly.

Can I Keep My Vehicle in Bankruptcy?

Carl Rolsma — Tue, 21 Jun 2011 17:00:20 +0000

Can you file for bankruptcy and still keep your vehicle? Maybe. There are a few ways to go about this. One way is by “reaffirmation.” If you have a car loan, you can complete an official reaffirmation form, along with the creditor. The form provides the amount you owe and the terms of repayment. In effect, a new loan is created and you get to keep your vehicle as long as you stay current. Not only that, but you may be able to negotiate more favorable terms in the new reaffirmed loan! This could include lowering the amount owed, lowering your monthly payment, or lowering the interest rate. Call Rolsma Law Firm for more information on ways that you can keep your vehicle while benefiting from the debt relief you can obtain through bankruptcy.

Credit Card Abuses to Avoid Before Bankruptcy

Carl Rolsma — Mon, 13 Jun 2011 15:18:29 +0000

Most credit card debts are unsecured, non-priority debts that will be readily discharged in a Chapter 7 bankruptcy. However, credit card debts may not be discharged if they are for cash advances 70 days prior to filing for bankruptcy or for luxury items purchased 90 days prior to filing. Another thing to be aware of is that some specialty credit cards have a security interest in the items purchased with the card. This can be the case when purchasing an appliance from an appliance store. If you have further questions about bankruptcy in Janesville, Madison, Rock County, Dane County, or the surrounding areas, contact us.

Business Owners and The Dreaded Means Test

Carl Rolsma — Sat, 11 Jun 2011 18:25:17 +0000

In our current down economy many small business owners are finding themselves on the hook for the debts of a failed business that they personally guaranteed. Then when they try to get a fresh start through bankruptcy, they run into the dreaded Means Test. The Means Test provides that if you earn above a certain level, you are not allowed to file a Chapter 7 bankruptcy, but are left with Chapters 11 and 13 as your only bankruptcy alternative. However, often overlooked is the fact that if your debts are primarily not consumer debts, the Means Test does not apply. What a relief this is for those who received incomplete or bad information about how the Means Test applies to them. Don’t assume that you won’t pass the Means Test until you talk to us. Whether you’re from Janesville, Madison, or the surrounding areas, give us a call or fill out our online questionnaire, and you’ll get the individualized help you need to deal with your debts.

How Does Bankruptcy Get Creditors Off My Back?

Carl Rolsma — Mon, 06 Dec 2010 23:21:59 +0000

Of course, the discharge of debts at the end of a bankruptcy case will keep creditors at bay, but before the finalization of a bankruptcy case most debtors enjoy the protection of an automatic stay. The word “stay” in a legal context simply means the stopping of something by a court. In a bankruptcy case, the automatic stay goes into effect upon the filing of the bankruptcy petition. The stay prevents harassment of debtors. It maintains the status quo for a period of time so that the bankruptcy court can take control of the claims against the debtor. Examples of what the automatic stay can prevent include: filing suit against the debtor, continuing suit against the debtor,garnishment of the debtor’s wages, and foreclosing on the debtor’s property.

Rock County Bankruptcy Attorneys Armed With Changes in Exemptions

Carl Rolsma — Thu, 04 Nov 2010 17:50:03 +0000

Recent changes to Wisconsin law provide for more generous exemptions for those filing for bankruptcy. If property is exempt, then creditors are unable to obtain this property or have it sold off to pay for debts. The homestead exemption has almost doubled from $40,000 to $75,000 . In the case of a married couple, each spouse may claim the homestead exemption of $75,000. The motor vehicles exemption has risen from $1,200 to $4,000 plus any unused portion of the consumer goods exemption. The consumer goods exemption has been raised from $5,000 to $12,000. Call us if you need the services of a bankruptcy lawyer in Janesville WI , a bankruptcy lawyer in Milton WI or a bankruptcy lawyer in other parts of Wisconsin. We can review your financial situation and let you know how the bankruptcy exemptions can allow you to keep some or all of your property while eliminating some or all of your debts.

New Means Test Numbers Make It Harder to Qualify for Ch. 7 on 11/1/10

Carl Rolsma — Mon, 25 Oct 2010 18:11:48 +0000

On November 1, 2010 new median family income numbers from the Census Bureau will be used in Chapter 7 Means Testing. The numbers in Wisconsin have come down. For example, the annual income for a family of 4 will be lowered from $80,530 to $76,188. So, if the income of a family of four is more than $76,188, and that family files on or after November 1, 2010, then a presumption arises that would move them from a Chapter 7 filing into a Chapter 13 filing. There is a Means Test Calculation that you need to plug your numbers into to see if you can file under Chapter 7. It does seem counter-intuitive that as average incomes go down, making it more difficult for people to pay their bills, the more difficult it becomes to qualify for the usually more desirable Chapter 7 bankruptcy. If you are thinking of filing for bankruptcy, and think you may no longer qualify for a Chapter 7 filing under the new numbers, call us right away so we can run your numbers to see if you need to file by October 31. If you would like to see numbers for all family sizes, go to this link.