Saturday, November 19, 2011

Sort out other Ways to avoid Bankruptcy

Filing bankruptcy is always referred to as the last ditch option that one should seek for when all other options are exhausted. When you file it, you do maximum damage to your credit score, your social status and your professional credibility. There are several other debt relief methods that you can follow to avoid filing bankruptcy. Debt settlement, debt consolidation programs and debt management plans are traditional ways to help you give debt relief. Cash refinance from house equity and short sales may also help you out and show you another path. The very word BK (bankruptcy) stays on the credit report for 7 to 10 years. So long it is there, your credit score cannot improve.

Enrolling in debt relief program you can find several customized ways to eliminate or reduce your debt. These are viable alternatives to bankruptcy. It is true that you cannot totally discharge your debt like you can with chapter 7. But, you can slash substantial amount locked in interest and late payment penalty. You could get newly arranged payment scheme and pay through long term installments. This will lower your monthly payment pressure and ensure that you can get rid of debt within 1 year to 5 years. Debt settlement program takes 1 year to 3 years to finish while debt consolidation takes 3 to 5 years. Bankruptcy chapter 13 resembles debt consolidation in some ways. But, debt consolidation works in consultation with your creditors while bankruptcy procedure is conducted by court administrated trustee.

If you are running short of cash and on the verge of bankruptcy, do not take any hasty decision immediately. If your house or real estate enjoys good market value, you can pull out some liquid money from your house equity and utilize it to pay off debt. It can save you from filing bankruptcy and prevent your asset from getting liquidated.

Short sale of home is another well known method by which you sell your house in less than what is owed. By selling the house in less value both you and your lender incur loss. But the proceeds are used to pay off the debt. It is accepted by both parties considering the uncertainties of bankruptcy procedure. This way you can also avoid bankruptcy.


About the Guest Author: Angela Sanders is the Financial Writer since 2003. She manages the contents of many financial sites. Currently, she is working as financial advisor for one of the largest MNC in Carson City, Nevada. Some of her blogs and articles can be found at A Financial Journal |

Monday, October 31, 2011

Chapter 7 Individual filing may go up after 11/1/11

Means test is the method used to determine the filing of bankruptcy under chapter 7. This will also determine the chapter 13 plan period and payments.

Section 707(b)(2) of the Bankruptcy Code applies a "means test" to determine whether an individual debtor's chapter 7 filing is presumed to be an abuse of the Bankruptcy Code requiring dismissal or conversion of the case (generally to chapter 13).

If the debtor’s current monthly income is below the state median income, debtor is not required to complete the means test.

According to the new median income published by the Census Bureau USDOJ: U.S. Trustee Program website, the median income for Individuals has increased in 32 States (see the figures highlighted in green). These New Means Test Numbers are applicable to means testing calculations from November 1, 2011.

As the median income in many states have increased, individual debtors who were not able to file the bankruptcy under chapter 7 earlier may be qualified to file the chapter 7 with the new means testing numbers.

This may lead to the more filing of bankruptcy under chapter 7. However, chapter 7 in the other states may decrease as the median income numbers have decreased.

State Median Income Comparison Table

State

1 earner

1 earner

2 People

2 People

3 People

3 People

4 People

4 People *

Till 31st

After 11/1/11

Till 31st

After 11/1/11

Till 31st

After 11/1/11

Till 31st

After 11/1/11

Alabama

$38,642

$38,321

$46,900

$46,025

$52,460

$51,182

$64,016

$61,593

Alaska

$51,950

$52,611

$75,460

$70,811

$81,447

$77,200

$85,964

$88,003

Arizona

$42,603

$41,385

$55,404

$53,781

$59,659

$56,508

$67,113

$61,267

Arkansas

$32,834

$34,203

$44,081

$44,048

$49,599

$47,035

$54,401

$56,275

California

$48,009

$47,683

$62,970

$61,539

$68,670

$66,050

$78,869

$74,806

Colorado

$48,598

$47,361

$64,679

$62,431

$70,861

$69,252

$83,976

$79,905

Connecticut

$57,863

$56,773

$71,961

$70,342

$83,655

$80,263

$103,314

$99,440

Delaware

$48,415

$48,049

$62,432

$59,927

$68,518

$71,259

$85,305

$79,829

District of Columbia

$48,822

$50,552

$80,172

$78,313

$80,172

$78,313

$80,172

$115,995

Florida

$40,029

$40,766

$50,130

$49,729

$54,594

$52,840

$65,135

$62,742

Georgia

$39,384

$39,694

$52,024

$50,712

$56,682

$55,711

$69,239

$64,223

Hawaii

$50,664

$51,099

$64,179

$62,432

$75,670

$75,900

$86,587

$82,726

Idaho

$39,050

$39,120

$48,648

$49,242

$55,453

$52,077

$61,480

$61,301

Illinois

$46,355

$45,545

$60,073

$57,964

$69,910

$66,758

$81,097

$79,074

Indiana

$40,135

$39,987

$51,104

$49,669

$59,028

$57,696

$69,226

$67,296

Iowa

$40,456

$40,650

$56,036

$55,217

$63,510

$62,251

$75,569

$72,234

Kansas

$41,654

$41,611

$57,174

$55,801

$64,863

$62,850

$69,272

$72,665

Kentucky

$37,606

$38,356

$45,081

$44,696

$51,883

$51,859

$63,768

$62,583

Louisiana

$38,108

$37,931

$46,704

$46,169

$55,699

$54,638

$67,239

$65,778

Maine

$39,497

$40,532

$51,600

$51,738

$59,050

$60,195

$68,466

$74,738

Maryland

$55,774

$57,455

$74,493

$73,947

$87,152

$84,151

$103,361

$100,928

Massachusetts

$55,049

$53,496

$68,243

$64,174

$83,736

$80,337

$102,110

$99,067

Michigan

$42,562

$43,677

$50,738

$50,079

$60,161

$58,467

$71,758

$70,237

Minnesota

$45,760

$46,161

$61,690

$61,170

$74,082

$71,784

$85,146

$84,251

Mississippi

$32,658

$33,126

$41,579

$41,601

$47,058

$45,536

$55,711

$54,765

Missouri

$39,332

$38,895

$51,120

$50,603

$58,610

$58,355

$69,832

$67,255

Montana

$38,577

$38,369

$52,412

$49,743

$56,265

$56,308

$67,921

$68,313

Nebraska

$38,915

$39,192

$54,124

$55,519

$65,486

$64,700

$71,097

$71,247

Nevada

$43,041

$43,146

$57,541

$55,573

$60,783

$60,855

$70,509

$65,179

New Hampshire

$51,460

$51,550

$63,534

$61,679

$82,465

$79,349

$89,990

$91,750

New Jersey

$59,060

$60,322

$70,680

$67,503

$85,573

$84,896

$101,106

$101,957

New Mexico

$37,274

$37,246

$51,855

$49,515

$52,303

$51,782

$53,709

$54,640

New York

$46,295

$45,931

$57,777

$56,113

$68,396

$66,953

$83,942

$81,212

North Carolina

$37,781

$37,892

$50,630

$48,710

$55,468

$54,310

$67,578

$65,036

North Dakota

$41,443

$42,953

$56,411

$58,742

$69,328

$67,244

$79,637

$79,336

Ohio

$40,749

$40,471

$51,319

$50,253

$60,247

$58,376

$72,625

$70,599

Oklahoma

$36,884

$37,466

$49,711

$48,313

$54,135

$53,332

$64,037

$60,395

Oregon

$44,707

$42,877

$55,553

$52,316

$60,523

$57,429

$72,767

$66,616

Pennsylvania

$44,897

$45,092

$53,706

$53,091

$67,113

$66,487

$79,916

$76,682

Rhode Island

$46,136

$46,335

$58,511

$59,624

$72,184

$66,800

$88,593

$86,267

South Carolina

$37,055

$37,660

$50,500

$47,853

$52,738

$50,824

$63,074

$62,912

South Dakota

$35,582

$36,799

$53,443

$55,026

$58,794

$61,612

$68,016

$69,006

Tennessee

$38,144

$37,967

$47,194

$47,234

$53,227

$51,642

$63,217

$60,909

Texas

$38,294

$39,673

$55,178

$53,950

$56,445

$57,825

$65,477

$63,859

Utah

$50,635

$48,176

$56,126

$55,555

$61,944

$59,626

$69,834

$64,780

Vermont

$43,042

$43,544

$57,948

$55,110

$65,829

$69,736

$78,392

$77,296

Virginia

$50,296

$50,605

$63,613

$64,288

$73,260

$71,644

$86,990

$87,498

Washington

$49,930

$51,671

$63,224

$61,919

$72,524

$69,195

$82,602

$80,404

West Virginia

$39,750

$40,887

$42,607

$44,018

$51,350

$50,987

$60,280

$61,691

Wisconsin

$41,150

$41,880

$56,080

$55,671

$66,256

$64,724

$77,438

$76,117

Wyoming

$46,172

$48,832

$60,829

$62,072

$69,677

$67,059

$76,361

$73,362

* Add $7,500 for each individual in excess of 4.

Commonwealth or U.S. Territory

1 earner

Family Size

2 People

3 People

4 People *

Guam

$36,480

$36,480

$43,617

$43,617

$49,704

$49,704

$60,149

$60,149

Northern Mariana Islands

$24,496

$24,496

$24,496

$24,496

$28,500

$28,500

$41,918

$41,918

Puerto Rico

$21,273

$21,190

$21,273

$21,190

$23,011

$21,479

$28,382

$27,838

Virgin Islands

$28,943

$28,943

$34,786

$34,786

$37,090

$37,090

$40,636

$40,636

* Add $7,500 for each individual in excess of 4.