Gregory & Clark, PLLC Articles Getting Started on Bankruptcy

Getting Started on Bankruptcy

By Gregory Clark  Feb. 23, 2011 1:21p

If you are considering filing for bankruptcy, you are not alone. With today’s present economy, record numbers of American’s are filing for bankruptcy relief. You do not need to feel ashamed if you have resorted to bankruptcy as a way out, statistics show that the predominant reasons people are led to bankruptcy are major medical expenses, job loss and divorce.

Individuals and married couples generally file for either Chapter 7 bankruptcy or Chapter 13 bankruptcy; with Chapter 7 bankruptcy being a “liquidation” bankruptcy, which means that most of your debts are erased or discharged through bankruptcy. In order to qualify for a Chapter 7 bankruptcy, you must first pass a bankruptcy “means test.”

The purpose of the bankruptcy means test is to reserve Chapter 7 bankruptcy for those who really need it. Those individuals who have a higher disposable income will be diverted to Chapter 13 bankruptcy, which is a debt-reorganization bankruptcy. With Chapter 13 bankruptcy, you pay off a portion of your debts over a 3 to 5 year period. The bankruptcy means test is calculated by evaluating whether or not your gross monthly income in the past six months is below your state’s median income for a household of your size. If your gross monthly income exceeds Florida’s median income, then your Florida bankruptcy attorney will apply a more detailed expense formula, which deducts certain allowable expenses. If you pass the formula, then you are eligible for a Chapter 7 bankruptcy, if your income is too high, then you will have to file a Chapter 13 bankruptcy instead.

Due to recent 2005 changes to bankruptcy law, all debtors are now required to complete two financial courses. Before they file, they must complete a credit counseling course, and they must complete a financial management course post filing, and before they can successfully obtain a discharge. The bankruptcy courses are very simple to complete and, they can be taken in person, by phone or over the internet. Each course costs approximately $50 and can be completed within a few hours.

Bankruptcy Attorney in Orlando

If you would like more information on filing for bankruptcy, contact an Orlando bankruptcy lawyer at Gregory & Clark, PLLC today. We can go over the details of your case with you and answer any questions that you may have.

Contact an Orlando bankruptcy attorney from our firm today for a free initial consultation.

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