The Means Test | Understanding Dischargeable Debts and Property Exemptions
When you’re struggling with unmanageable debt, bankruptcy may seem like the right option. But how can you afford to pay a bankruptcy attorney when you can’t make your mortgage payment? You might believe that you can handle your own Chapter 7 bankruptcy filing. But attempting to do so is usually a mistake!
The Means Test
The first factor that complicates the personal bankruptcy process is the requirement of the “means test.” You may want to permanently discharge your debts in Chapter 7 (and you may be able to do so), but before you can file, you must demonstrate to the court that you lack the resources to repay your creditors over a three- to five-year period. The criteria that you must meet can be complex and confusing, and it typically varies from state to state. An experienced lawyer can tell you pretty quickly whether you qualify for Chapter 7, but it could take you days, weeks, or months to figure it out yourself.
The Debts That May Be Discharged
You may not be able to discharge all your debts in Chapter 7. A knowledgeable attorney can assess your situation and tell you which debts aren’t subject to discharge, such as child support obligations. In addition, some debts, such as tax arrearages and student loan obligations, might not be dischargeable, and the process for getting them discharged can be challenging.
The Property You Can Keep
In Chapter 7, you agree to transfer certain assets to the bankruptcy court in exchange for the discharge of debt. But you can claim certain assets as exempt from the bankruptcy estate. Without an attorney, you’ll have to try to determine your exemptions. Further complicating the situation, you’ll need to choose between the exemptions permitted under state law and those permitted under federal law.
Contact an Experienced Rockwall, Texas, Bankruptcy Attorney
At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. To arrange an appointment, contact my office online or call 972-772-3083. I handle Texas personal bankruptcy filings in Rockwall County, Collin County, Dallas County, Hunt County, and the surrounding counties.
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