FLINT BANKRUPTCY SERVICE ARE OFFERED BY FLINT BANKRUPTCY LAWYER TERRY BANKERT 235-1970 or http://www.attorneybankert.com


FLINT BANKRUPTCY SERVICE ARE OFFERED BY FLINT BANKRUPTCY LAWYER TERRY BANKERT 235-1970

Voluntary Flint Area Bankruptcy Petitions: Chapters 7, 11, 12, and 13

Can you file?e

Most people who reside in the United States or whose domicile, place of business, or property is in the United States may file a voluntary petition under Chapter 7 of the Bankruptcy Code. 11 USC 109(a). See Official Flint Area Bankruptcy Form B1, Voluntary Petition, available at http://www.uscourts.gov/bkforms/. Certain persons, such as railroads, banks, and insurance companies, may not be debtors under Chapter 7. 11 USC 109(b). Persons who are qualified to file petitions under Chapter 7 may also seek relief under Chapter 11, as may railroads. 11 USC 101(19A), 109(d).

For additional information contact Terry Bankert at http://www.attornerybankert.com

A family farmer or family fisherman with regular annual income may commence a Chapter 12 case. 11 USC 109(f). The Bankruptcy Code defines the terms family farmer and family fishermen to include individuals, corporations, and partnerships if these persons or entities meet various tests set out in the code. 11 USC 101(18), (19A).

Chapter 13 is limited to individuals who earn enough regular income to make payments under a Chapter 13 plan and whose debts fall below certain ceilings. 11 USC 109(e). Only individuals with regular income who have, on the date of filing, matured and liquidated secured debts amounting to less than $1,081,400 and unsecured debts amounting to less than $360,475 may seek relief under Chapter 13. 11 USC 109(e).

Means test dollar limits are adjusted every three years and were last increased effective April 1, 2010.

BAPCPA added a new provision at 11 USC 109(h), which states that an individual may not be a Flint Area Bankruptcy debtor unless the individual has, during the 180 days ending on the filing of the Flint Area Bankruptcy petition, received from an approved nonprofit budget and credit counseling agency a briefing (in person, by telephone, or over the Internet). The U.S. trustee is responsible for approving such counseling agencies and maintains a listing of such agencies on its website. A waiver of the credit counseling requirement is possible in certain emergency or limited circumstances. 11 USC 109(h)(3) and (4). The prospective debtor who completes the briefing must obtain a certificate from the counseling agency and file that certificate with the Flint Area Bankruptcy petition. Failure to complete the briefing before the petition date will result in the dismissal of the case.

A Flint Bankruptcy petition under Chapter 7 may be filed only if a debtor with primarily consumer debts meets a new means test under 11 USC 707(b). The Sixth Circuit Court of Appeals rejected a constitutional challenge to the means test in Schultz v United States, 529 F3d 343 (6th Cir 2008). In essence, the means test takes the debtor’s income and subtracts from it certain allowed expenses. The test is designed to steer into Chapter 13 those debtors who have some ability to pay some of their debts. As a general rule, a Chapter 7 debtor with mostly consumer debts will satisfy the means test only if the debtor’s income is less than the state’s median family income. Michigan’s median family income for one earner (one-person household) is $42,562 (eff. March 15, 2011). See the State Median Family Income page of the U. S. Census Bureau website at http://www.census.gov/hhes/www/income/statemedfaminc.html. If the debtor fails the means test, then the filing of the Chapter 7 Flint Area Bankruptcy case is presumed abusive, a presumption that may be rebutted only with a showing of special circumstances. 11 USC 707(b)(2)(B). Unless rebutted, a presumption of abuse will result in the dismissal of the Flint Area Bankruptcy case upon the motion of the U.S. trustee, the Flint Area Bankruptcy trustee, a party-in-interest, or the court. 11 USC 707(b)(2). Section 707(b)(2) sets forth a complicated formula for means testing to determine whether a presumption of abuse arises. If the debtor’s income is below the state median, the means test and the presumption of abuse do not apply. If, however, the debtor’s income exceeds the state median family income, the Flint Area Bankruptcy Code requires the use of a formula to determine whether the presumption of abuse arises. The U.S. trustee is directed by 11 USC 704(b) to review all materials filed by the debtor to determine whether the presumption of abuse arises. Official Flint Area Bankruptcy Form B22A, available at http://www.uscourts.gov/bkforms/, provides the means test calculation.

FLINT BANKRUPTCY SERVICE ARE OFFERED BY FLINT BANKRUPTCY LAWYER TERRY BANKERT 235-1970 or http://www.attorneybankert.com

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