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2 years 2 months ago

http://nwdrlf.com/wp-content/uploads/2016/08/TomMcAvityAugust2016InterviewGetyourlicensebackwithChapter13.mp3

Katherine:

Today, our friend, Tom McAvity, has joined us again and he’s going to share with us something that I had no idea about, that Chapter 13 could do, and I bet it will surprise you, too. Tom, thank you so much for joining us again on This Needs To Be Said. How are you?

Tom:

Good morning. How are you doing?

Katherine:

I’m wonderful. See, I got your name right. I did it.

Tom:

You did. You nailed it.

Katherine:

Yay! All right. We’re going to talk about Chapter 13 today and, there’s something surprising that you’re going to share with us as well, but I’m going to go ahead and turn the conversation over to you about how Chapter 13 can turn things around for individuals who need to get back on track. You said something about them getting their driver’s license back, so I need to hear more about this.

Tom:

Oh, yeah. Chapter 13 can be a misunderstood element of Chapter 13 is that it can be an incredibly effective tool for getting a driver’s license back. Obviously, most of our clients are more interested in Chapter 7 bankruptcy, often because they think that Chapter 13 bankruptcy means that they’re going to have to pay all of their creditors back. Of course, far from it, most of our clients who do file Chapter 13 end up paying back maybe pennies or dimes on the dollar, rather than what they actually owe.
One of the nicer elements of Chapter 13, that Chapter 7 does not offer, is for standard … It’s an over simplification, but it’s basically true. For your standard, run-of-the-mill tickets, your parking tickets, your minor infraction tickets, non-criminal stuff, not a DUI or anything like that, but just your run-of-the-mill tickets that most of us incur. I’m embarrassed to say, I myself have gotten a few of them over the years. What Chapter 13 will enable you to do, is where your license has been suspended for failure to pay those tickets, and that happens to a lot of our clients, those tickets rack up interest and penalties and many people, as much as they would like to pay those tickets back, can’t and they end up getting their licenses suspended. Chapter 13 will almost always enable the Chapter 13 filer to go back to the DMV and get their license back shortly after filing, even though they haven’t really paid anything back yet to those tickets, if at all, and maybe they’re not going to end up paying much of anything back at all.
The Chapter 13 filing enables them to get that license back. The hindrance to getting their license, which is the non-payment, is removed as an issues and that enables them to get the license back. For a lot of our clients, having a driver’s license is the difference between working and not working, and eating and not eating for their families, so it’s a … Not many people know about it and unfortunately, a lot of people will just sit there with no licenses for months, if not years, on end and end up getting other driving while suspended, or driving without a license, because they don’t know that they can simply get this Chapter 13 filed and get that license back.
It’s something I wish more people knew about. It’s certainly something that’s not available in a Chapter 7 bankruptcy. It’s often an advantage to filing Chapter 13.

Schedule an appointment

Katherine:

That is awesome to know. Our conversations with you are to help people understand that bankruptcy is not a bad word. The more I talk with you, the more we learn that there’s so much else in here, other than wiping the slate clean. I think of wiping the slate clean is just like, “Okay, we’re just getting rid of those bills,” but I would not have ever thought about being able to do anything other than start at zero. I didn’t think about getting a license back or restoring myself.
It just never automatically came up as a good thing and it’s like it would be a whisper if somebody had to file bankruptcy. If you found out about it, you may find out by accident, and something had to happen like they went to apply for something and they didn’t get it and they say, “It was because I had a bankruptcy on there.” “When did you get a bankruptcy?” It may not have been for the bankruptcy, what I’m learning, that they did not get approved for but that is what we believe. You have shown us a lot there.
Filing Chapter 13 has lots of benefits for someone needing to get situated again. What better way of being able to restore your life than … Granted, what we’ve said here is there are particular things that it will allow you to restore your license from. If you have unpaid tickets that you just didn’t have the money for, now with restructuring things, you will have the money to get your license back, so now you’re driving and you’re really able to get back on your feet with a fresh start.

Tom:

Exactly.

Katherine:

That is a huge, huge, “Wow,” and, “Ah-ha,” moment for me. I’m saying this jokingly, but it almost makes me want to go out and file bankruptcy. I’m not in trouble, but I might have to call you, “How do you get in trouble?”

Tom:

It makes me want to file, too. Yeah, I know what you mean.

Katherine:

Wow. I want you to tell people, how can they get in touch with you outside of This Needs To Be Said?

Tom:

I think the best way to do that is call one of our offices. They can call our Portland office at 503-232-5303, the Seattle office at 674-4559, and our Vancouver office at 360-828-0110. Our appointment setters there are super. There’s Shane and Chantal and either one of them would be more than willing to set either an in-person appointment, a phone appointment, and now we’re even doing video appointments where …
You know, people get so busy these days. It can be hard to find the time to go to a lawyer’s office, especially for married people. Two jobs, maybe childcare as well, trying to coordinate visiting a lawyer on your off hours, it can get complex in a hurry. I have to admit, getting my wife and I to any one place with two jobs and a kid is not easy. Who wants to think that much about getting to a lawyer’s office, so we started offering our video appointments where I can virtually meet with people. They can sit at their home, look at their computer, and over the internet we can do a video appointment that’s every bit as valuable, I think, as someone coming in.
We like to offer both. Some people like to just come in and that’s great. We’re happy to do it that way, but for those who are little more challenged, in terms of their ability and resources, to come in, we offer the video appointments, which I think can be super helpful. From what I understand, we’re the only firm that offers those.

Katherine:

That’s the first I’ve heard of it. I’ve heard of some doctor’s offices starting to offer that, but especially for someone who shouldn’t be driving because they don’t have their license, excellent, excellent, excellent.

Tom:

Right. You know, I hadn’t even thought of that, but exactly right. We’re trying to get someone’s license back, in some cases, and we’re asking them to drive to our office, which isn’t super. Yeah, that video appointment can be real helpful in that case.

Katherine:

Right on time. Right on time. Awesome. I want to say thank you so much for being here with us on Today and, until next time, have a wonderful day.

Tom:

Thank you, you too. It was nice talking to you this morning.

Schedule an appointment

.inter_tbl {margin-top: 30px;border:none;}.inter_tbl tr td:first-child {min-width: 85px;}.inter_tbl tr td:nth-child(2),.inter_tbl tr td:nth-child(2) p {font-size: 13px;line-height: 20px;}
 The original post is titled Get Your License Back with a Chapter 13 – August 2016 Interview , and it came from Portland Bankruptcy Attorney | Northwest Debt Relief .


1 year 11 months ago

http://nwdrlf.com/wp-content/uploads/2016/08/TomMcAvityAugust2016InterviewGetyourlicensebackwithChapter13.mp3

Katherine:

Today, our friend, Tom McAvity, has joined us again and he’s going to share with us something that I had no idea about, that Chapter 13 could do, and I bet it will surprise you, too. Tom, thank you so much for joining us again on This Needs To Be Said. How are you?

Tom:

Good morning. How are you doing?

Katherine:

I’m wonderful. See, I got your name right. I did it.

Tom:

You did. You nailed it.

Katherine:

Yay! All right. We’re going to talk about Chapter 13 today and, there’s something surprising that you’re going to share with us as well, but I’m going to go ahead and turn the conversation over to you about how Chapter 13 can turn things around for individuals who need to get back on track. You said something about them getting their driver’s license back, so I need to hear more about this.

Tom:

Oh, yeah. Chapter 13 can be a misunderstood element of Chapter 13 is that it can be an incredibly effective tool for getting a driver’s license back. Obviously, most of our clients are more interested in Chapter 7 bankruptcy, often because they think that Chapter 13 bankruptcy means that they’re going to have to pay all of their creditors back. Of course, far from it, most of our clients who do file Chapter 13 end up paying back maybe pennies or dimes on the dollar, rather than what they actually owe.
One of the nicer elements of Chapter 13, that Chapter 7 does not offer, is for standard … It’s an over simplification, but it’s basically true. For your standard, run-of-the-mill tickets, your parking tickets, your minor infraction tickets, non-criminal stuff, not a DUI or anything like that, but just your run-of-the-mill tickets that most of us incur. I’m embarrassed to say, I myself have gotten a few of them over the years. What Chapter 13 will enable you to do, is where your license has been suspended for failure to pay those tickets, and that happens to a lot of our clients, those tickets rack up interest and penalties and many people, as much as they would like to pay those tickets back, can’t and they end up getting their licenses suspended. Chapter 13 will almost always enable the Chapter 13 filer to go back to the DMV and get their license back shortly after filing, even though they haven’t really paid anything back yet to those tickets, if at all, and maybe they’re not going to end up paying much of anything back at all.
The Chapter 13 filing enables them to get that license back. The hindrance to getting their license, which is the non-payment, is removed as an issues and that enables them to get the license back. For a lot of our clients, having a driver’s license is the difference between working and not working, and eating and not eating for their families, so it’s a … Not many people know about it and unfortunately, a lot of people will just sit there with no licenses for months, if not years, on end and end up getting other driving while suspended, or driving without a license, because they don’t know that they can simply get this Chapter 13 filed and get that license back.
It’s something I wish more people knew about. It’s certainly something that’s not available in a Chapter 7 bankruptcy. It’s often an advantage to filing Chapter 13.

Schedule an appointment

Katherine:

That is awesome to know. Our conversations with you are to help people understand that bankruptcy is not a bad word. The more I talk with you, the more we learn that there’s so much else in here, other than wiping the slate clean. I think of wiping the slate clean is just like, “Okay, we’re just getting rid of those bills,” but I would not have ever thought about being able to do anything other than start at zero. I didn’t think about getting a license back or restoring myself.
It just never automatically came up as a good thing and it’s like it would be a whisper if somebody had to file bankruptcy. If you found out about it, you may find out by accident, and something had to happen like they went to apply for something and they didn’t get it and they say, “It was because I had a bankruptcy on there.” “When did you get a bankruptcy?” It may not have been for the bankruptcy, what I’m learning, that they did not get approved for but that is what we believe. You have shown us a lot there.
Filing Chapter 13 has lots of benefits for someone needing to get situated again. What better way of being able to restore your life than … Granted, what we’ve said here is there are particular things that it will allow you to restore your license from. If you have unpaid tickets that you just didn’t have the money for, now with restructuring things, you will have the money to get your license back, so now you’re driving and you’re really able to get back on your feet with a fresh start.

Tom:

Exactly.

Katherine:

That is a huge, huge, “Wow,” and, “Ah-ha,” moment for me. I’m saying this jokingly, but it almost makes me want to go out and file bankruptcy. I’m not in trouble, but I might have to call you, “How do you get in trouble?”

Tom:

It makes me want to file, too. Yeah, I know what you mean.

Katherine:

Wow. I want you to tell people, how can they get in touch with you outside of This Needs To Be Said?

Tom:

I think the best way to do that is call one of our offices. They can call our Portland office at 503-232-5303, the Seattle office at 674-4559, and our Vancouver office at 360-828-0110. Our appointment setters there are super. There’s Shane and Chantal and either one of them would be more than willing to set either an in-person appointment, a phone appointment, and now we’re even doing video appointments where …
You know, people get so busy these days. It can be hard to find the time to go to a lawyer’s office, especially for married people. Two jobs, maybe childcare as well, trying to coordinate visiting a lawyer on your off hours, it can get complex in a hurry. I have to admit, getting my wife and I to any one place with two jobs and a kid is not easy. Who wants to think that much about getting to a lawyer’s office, so we started offering our video appointments where I can virtually meet with people. They can sit at their home, look at their computer, and over the internet we can do a video appointment that’s every bit as valuable, I think, as someone coming in.
We like to offer both. Some people like to just come in and that’s great. We’re happy to do it that way, but for those who are little more challenged, in terms of their ability and resources, to come in, we offer the video appointments, which I think can be super helpful. From what I understand, we’re the only firm that offers those.

Katherine:

That’s the first I’ve heard of it. I’ve heard of some doctor’s offices starting to offer that, but especially for someone who shouldn’t be driving because they don’t have their license, excellent, excellent, excellent.

Tom:

Right. You know, I hadn’t even thought of that, but exactly right. We’re trying to get someone’s license back, in some cases, and we’re asking them to drive to our office, which isn’t super. Yeah, that video appointment can be real helpful in that case.

Katherine:

Right on time. Right on time. Awesome. I want to say thank you so much for being here with us on Today and, until next time, have a wonderful day.

Tom:

Thank you, you too. It was nice talking to you this morning.

Schedule an appointment

.inter_tbl {margin-top: 30px;border:none;}.inter_tbl tr td:first-child {min-width: 85px;}.inter_tbl tr td:nth-child(2),.inter_tbl tr td:nth-child(2) p {font-size: 13px;line-height: 20px;}
 The original post is titled Get Your License Back with a Chapter 13 – August 2016 Interview , and it came from Portland Bankruptcy Attorney | Northwest Debt Relief .


1 year 5 months ago

https://nwdrlf.com/wp-content/uploads/2016/08/TomMcAvityAugust2016InterviewGetyourlicensebackwithChapter13.mp3

Katherine:

Today, our friend, Tom McAvity, has joined us again and he’s going to share with us something that I had no idea about, that Chapter 13 could do, and I bet it will surprise you, too. Tom, thank you so much for joining us again on This Needs To Be Said. How are you?

Tom:

Good morning. How are you doing?

Katherine:

I’m wonderful. See, I got your name right. I did it.

Tom:

You did. You nailed it.

Katherine:

Yay! All right. We’re going to talk about Chapter 13 today and, there’s something surprising that you’re going to share with us as well, but I’m going to go ahead and turn the conversation over to you about how Chapter 13 can turn things around for individuals who need to get back on track. You said something about them getting their driver’s license back, so I need to hear more about this.

Tom:

Oh, yeah. Chapter 13 can be a misunderstood element of Chapter 13 is that it can be an incredibly effective tool for getting a driver’s license back. Obviously, most of our clients are more interested in Chapter 7 bankruptcy, often because they think that Chapter 13 bankruptcy means that they’re going to have to pay all of their creditors back. Of course, far from it, most of our clients who do file Chapter 13 end up paying back maybe pennies or dimes on the dollar, rather than what they actually owe.
One of the nicer elements of Chapter 13, that Chapter 7 does not offer, is for standard … It’s an over simplification, but it’s basically true. For your standard, run-of-the-mill tickets, your parking tickets, your minor infraction tickets, non-criminal stuff, not a DUI or anything like that, but just your run-of-the-mill tickets that most of us incur. I’m embarrassed to say, I myself have gotten a few of them over the years. What Chapter 13 will enable you to do, is where your license has been suspended for failure to pay those tickets, and that happens to a lot of our clients, those tickets rack up interest and penalties and many people, as much as they would like to pay those tickets back, can’t and they end up getting their licenses suspended. Chapter 13 will almost always enable the Chapter 13 filer to go back to the DMV and get their license back shortly after filing, even though they haven’t really paid anything back yet to those tickets, if at all, and maybe they’re not going to end up paying much of anything back at all.
The Chapter 13 filing enables them to get that license back. The hindrance to getting their license, which is the non-payment, is removed as an issues and that enables them to get the license back. For a lot of our clients, having a driver’s license is the difference between working and not working, and eating and not eating for their families, so it’s a … Not many people know about it and unfortunately, a lot of people will just sit there with no licenses for months, if not years, on end and end up getting other driving while suspended, or driving without a license, because they don’t know that they can simply get this Chapter 13 filed and get that license back.
It’s something I wish more people knew about. It’s certainly something that’s not available in a Chapter 7 bankruptcy. It’s often an advantage to filing Chapter 13.

Schedule an appointment

Katherine:

That is awesome to know. Our conversations with you are to help people understand that bankruptcy is not a bad word. The more I talk with you, the more we learn that there’s so much else in here, other than wiping the slate clean. I think of wiping the slate clean is just like, “Okay, we’re just getting rid of those bills,” but I would not have ever thought about being able to do anything other than start at zero. I didn’t think about getting a license back or restoring myself.
It just never automatically came up as a good thing and it’s like it would be a whisper if somebody had to file bankruptcy. If you found out about it, you may find out by accident, and something had to happen like they went to apply for something and they didn’t get it and they say, “It was because I had a bankruptcy on there.” “When did you get a bankruptcy?” It may not have been for the bankruptcy, what I’m learning, that they did not get approved for but that is what we believe. You have shown us a lot there.
Filing Chapter 13 has lots of benefits for someone needing to get situated again. What better way of being able to restore your life than … Granted, what we’ve said here is there are particular things that it will allow you to restore your license from. If you have unpaid tickets that you just didn’t have the money for, now with restructuring things, you will have the money to get your license back, so now you’re driving and you’re really able to get back on your feet with a fresh start.

Tom:

Exactly.

Katherine:

That is a huge, huge, “Wow,” and, “Ah-ha,” moment for me. I’m saying this jokingly, but it almost makes me want to go out and file bankruptcy. I’m not in trouble, but I might have to call you, “How do you get in trouble?”

Tom:

It makes me want to file, too. Yeah, I know what you mean.

Katherine:

Wow. I want you to tell people, how can they get in touch with you outside of This Needs To Be Said?

Tom:

I think the best way to do that is call one of our offices. They can call our Portland office at 503-232-5303, the Seattle office at 674-4559, and our Vancouver office at 360-828-0110. Our appointment setters there are super. There’s Shane and Chantal and either one of them would be more than willing to set either an in-person appointment, a phone appointment, and now we’re even doing video appointments where …
You know, people get so busy these days. It can be hard to find the time to go to a lawyer’s office, especially for married people. Two jobs, maybe childcare as well, trying to coordinate visiting a lawyer on your off hours, it can get complex in a hurry. I have to admit, getting my wife and I to any one place with two jobs and a kid is not easy. Who wants to think that much about getting to a lawyer’s office, so we started offering our video appointments where I can virtually meet with people. They can sit at their home, look at their computer, and over the internet we can do a video appointment that’s every bit as valuable, I think, as someone coming in.
We like to offer both. Some people like to just come in and that’s great. We’re happy to do it that way, but for those who are little more challenged, in terms of their ability and resources, to come in, we offer the video appointments, which I think can be super helpful. From what I understand, we’re the only firm that offers those.

Katherine:

That’s the first I’ve heard of it. I’ve heard of some doctor’s offices starting to offer that, but especially for someone who shouldn’t be driving because they don’t have their license, excellent, excellent, excellent.

Tom:

Right. You know, I hadn’t even thought of that, but exactly right. We’re trying to get someone’s license back, in some cases, and we’re asking them to drive to our office, which isn’t super. Yeah, that video appointment can be real helpful in that case.

Katherine:

Right on time. Right on time. Awesome. I want to say thank you so much for being here with us on Today and, until next time, have a wonderful day.

Tom:

Thank you, you too. It was nice talking to you this morning.

Schedule an appointment

.inter_tbl {margin-top: 30px;border:none;}.inter_tbl tr td:first-child {min-width: 85px;}.inter_tbl tr td:nth-child(2),.inter_tbl tr td:nth-child(2) p {font-size: 13px;line-height: 20px;}
The post Get Your License Back with a Chapter 13 – August 2016 Interview appeared first on Portland Bankruptcy Attorney | Northwest Debt Relief.


1 year 5 months ago

The quickest and easiest way to understand why you care about “household size” is to think about the Means Test as a budget.  With the Means Test, the larger the “household size” the greater the amount of money you can set aside for living expenses.  The more you get for living expenses, the less you have left over for creditors.   If you have very little left over, then you increase your chances of qualifying for a Chapter 7 debt discharge.  If, on the other hand,  you have “too much” income left over and available for creditors, then you might not qualify for a Chapter 7; you might have to file a Chapter 13 and pay that left over money to creditors over three to five years.
Of course, there is nothing wrong with filing a Chapter 13.  But, you don’t want to look like you have extra money left over to pay into a Chapter 13 if you really do not.   So, choosing the correct “household size” really matters.   The larger the household size, the greater the income you can make and retain for household expenses.
 HOW IS A DEBTOR’S “HOUSEHOLD SIZE” DETERMINED?
The Bankruptcy Code does not tell say how a court is supposed to make that determination.   As a result, courts have been left with the task to determine what Congress meant when it said “household size”.
Three basic approaches have developed:

  •  Heads on Beds:   The “household” includes anyone living in a debtor’s home at the time he or she files for bankruptcy as part of a household for means test calculation purposes.
  •  IRS “Dependent” Test:  A debtor can claim anyone that is a “dependent” under IRS rule.
  •  Economic Unit:  A person is a member of a debtor’s household if that person is part of a “single economic unit” with the debtor.    So, this approach would include dependents AND, for example, a debtor’s significant other and children as long as they live as a family/economic unit.

 WHICH “HOUSEHOLD SIZE” APPROACH IS CORRECT?
Because the Bankruptcy Code does not provide the method to determine “household size”, it’s up to the courts to decide.  That means a debtor’s household size is based on how the controlling courts have ruled.
In Washington, we have typically followed the “Economic Unit” approach.  Further, other courts within the Ninth Circuit (which includes Washington and Oregon) has adopted the “Economic Unit” approach. See, e.g., In re Kops, 2012 WL 438623 (debtor’s children who lived part-time with debtor are included) (D.Idaho); In re Crow, 2012 WL 8255519 (E.D.CA 2012) (debtor’s boyfriend was included).   Until we hear differently, it appears that the “economic unit” approach is appropriate in Washington.
 WHAT’S THE RESULT OF USING THE “ECONOMIC UNIT” APPROACH?
Fewer and fewer “families” are the traditional husband and wife with 2.5 kids.    The “economic unit” approach allows financial reality to be reflected in the Means Test.  For example, a debtor with a child might live with significant other that has a child by another relationship.   There are four people in that household.  Thus, the “household size” is four.
In the above example, if the significant other has an income, then that income should be included in the Means Test.  They are, after all, a single economic unit.
“Household size” would include anyone that lives full time in the home that is financially dependent on the debtor.   It would include, arguably, any child that lives with the debtor even part-time.  It would include significant others as long as they are financially entwined with the debtor (it might not include the significant other if he/she had separate income, banked separately and otherwise kept their finances separate).  It would include the significant other’s children assuming they all operate as a single economic unit.   Basically, if it looks and acts like a new era “family”, then they are included in the household.
The more “out there” living arrangements might be, the less clear the household size.   Sometimes you just have to make your best argument and see if the court agrees.
 FINAL POINTS
Selecting the right household size can make the different between qualifying for a Chapter 7 or not.   It can make the difference between a three year and five year Chapter 13 Plan.
We are more than qualified to help you work through these issues and others so that you can obtain financial relief.  We offer a free initial consult.   Just let us know if we can help.
The post Household Size on Bankruptcy Means Test appeared first on Portland Bankruptcy Attorney | Northwest Debt Relief.


2 years 2 months ago

The quickest and easiest way to understand why you care about “household size” is to think about the Means Test as a budget.  With the Means Test, the larger the “household size” the greater the amount of money you can set aside for living expenses.  The more you get for living expenses, the less you have left over for creditors.   If you have very little left over, then you increase your chances of qualifying for a Chapter 7 debt discharge.  If, on the other hand,  you have “too much” income left over and available for creditors, then you might not qualify for a Chapter 7; you might have to file a Chapter 13 and pay that left over money to creditors over three to five years.
Of course, there is nothing wrong with filing a Chapter 13.  But, you don’t want to look like you have extra money left over to pay into a Chapter 13 if you really do not.   So, choosing the correct “household size” really matters.   The larger the household size, the greater the income you can make and retain for household expenses.
 HOW IS A DEBTOR’S “HOUSEHOLD SIZE” DETERMINED?
The Bankruptcy Code does not tell say how a court is supposed to make that determination.   As a result, courts have been left with the task to determine what Congress meant when it said “household size”.
Three basic approaches have developed:

  •  Heads on Beds:   The “household” includes anyone living in a debtor’s home at the time he or she files for bankruptcy as part of a household for means test calculation purposes.
  •  IRS “Dependent” Test:  A debtor can claim anyone that is a “dependent” under IRS rule.
  •  Economic Unit:  A person is a member of a debtor’s household if that person is part of a “single economic unit” with the debtor.    So, this approach would include dependents AND, for example, a debtor’s significant other and children as long as they live as a family/economic unit.

 WHICH “HOUSEHOLD SIZE” APPROACH IS CORRECT?
Because the Bankruptcy Code does not provide the method to determine “household size”, it’s up to the courts to decide.  That means a debtor’s household size is based on how the controlling courts have ruled.
In Washington, we have typically followed the “Economic Unit” approach.  Further, other courts within the Ninth Circuit (which includes Washington and Oregon) has adopted the “Economic Unit” approach. See, e.g., In re Kops, 2012 WL 438623 (debtor’s children who lived part-time with debtor are included) (D.Idaho); In re Crow, 2012 WL 8255519 (E.D.CA 2012) (debtor’s boyfriend was included).   Until we hear differently, it appears that the “economic unit” approach is appropriate in Washington.
 WHAT’S THE RESULT OF USING THE “ECONOMIC UNIT” APPROACH?
Fewer and fewer “families” are the traditional husband and wife with 2.5 kids.    The “economic unit” approach allows financial reality to be reflected in the Means Test.  For example, a debtor with a child might live with significant other that has a child by another relationship.   There are four people in that household.  Thus, the “household size” is four.
In the above example, if the significant other has an income, then that income should be included in the Means Test.  They are, after all, a single economic unit.
“Household size” would include anyone that lives full time in the home that is financially dependent on the debtor.   It would include, arguably, any child that lives with the debtor even part-time.  It would include significant others as long as they are financially entwined with the debtor (it might not include the significant other if he/she had separate income, banked separately and otherwise kept their finances separate).  It would include the significant other’s children assuming they all operate as a single economic unit.   Basically, if it looks and acts like a new era “family”, then they are included in the household.
The more “out there” living arrangements might be, the less clear the household size.   Sometimes you just have to make your best argument and see if the court agrees.
 FINAL POINTS
Selecting the right household size can make the different between qualifying for a Chapter 7 or not.   It can make the difference between a three year and five year Chapter 13 Plan.
We are more than qualified to help you work through these issues and others so that you can obtain financial relief.  We offer a free initial consult.   Just let us know if we can help.
 The original post is titled Household Size on Bankruptcy Means Test , and it came from Portland Bankruptcy Attorney | Northwest Debt Relief .


1 year 11 months ago

The quickest and easiest way to understand why you care about “household size” is to think about the Means Test as a budget.  With the Means Test, the larger the “household size” the greater the amount of money you can set aside for living expenses.  The more you get for living expenses, the less you have left over for creditors.   If you have very little left over, then you increase your chances of qualifying for a Chapter 7 debt discharge.  If, on the other hand,  you have “too much” income left over and available for creditors, then you might not qualify for a Chapter 7; you might have to file a Chapter 13 and pay that left over money to creditors over three to five years.
Of course, there is nothing wrong with filing a Chapter 13.  But, you don’t want to look like you have extra money left over to pay into a Chapter 13 if you really do not.   So, choosing the correct “household size” really matters.   The larger the household size, the greater the income you can make and retain for household expenses.
 HOW IS A DEBTOR’S “HOUSEHOLD SIZE” DETERMINED?
The Bankruptcy Code does not tell say how a court is supposed to make that determination.   As a result, courts have been left with the task to determine what Congress meant when it said “household size”.
Three basic approaches have developed:

  •  Heads on Beds:   The “household” includes anyone living in a debtor’s home at the time he or she files for bankruptcy as part of a household for means test calculation purposes.
  •  IRS “Dependent” Test:  A debtor can claim anyone that is a “dependent” under IRS rule.
  •  Economic Unit:  A person is a member of a debtor’s household if that person is part of a “single economic unit” with the debtor.    So, this approach would include dependents AND, for example, a debtor’s significant other and children as long as they live as a family/economic unit.

 WHICH “HOUSEHOLD SIZE” APPROACH IS CORRECT?
Because the Bankruptcy Code does not provide the method to determine “household size”, it’s up to the courts to decide.  That means a debtor’s household size is based on how the controlling courts have ruled.
In Washington, we have typically followed the “Economic Unit” approach.  Further, other courts within the Ninth Circuit (which includes Washington and Oregon) has adopted the “Economic Unit” approach. See, e.g., In re Kops, 2012 WL 438623 (debtor’s children who lived part-time with debtor are included) (D.Idaho); In re Crow, 2012 WL 8255519 (E.D.CA 2012) (debtor’s boyfriend was included).   Until we hear differently, it appears that the “economic unit” approach is appropriate in Washington.
 WHAT’S THE RESULT OF USING THE “ECONOMIC UNIT” APPROACH?
Fewer and fewer “families” are the traditional husband and wife with 2.5 kids.    The “economic unit” approach allows financial reality to be reflected in the Means Test.  For example, a debtor with a child might live with significant other that has a child by another relationship.   There are four people in that household.  Thus, the “household size” is four.
In the above example, if the significant other has an income, then that income should be included in the Means Test.  They are, after all, a single economic unit.
“Household size” would include anyone that lives full time in the home that is financially dependent on the debtor.   It would include, arguably, any child that lives with the debtor even part-time.  It would include significant others as long as they are financially entwined with the debtor (it might not include the significant other if he/she had separate income, banked separately and otherwise kept their finances separate).  It would include the significant other’s children assuming they all operate as a single economic unit.   Basically, if it looks and acts like a new era “family”, then they are included in the household.
The more “out there” living arrangements might be, the less clear the household size.   Sometimes you just have to make your best argument and see if the court agrees.
 FINAL POINTS
Selecting the right household size can make the different between qualifying for a Chapter 7 or not.   It can make the difference between a three year and five year Chapter 13 Plan.
We are more than qualified to help you work through these issues and others so that you can obtain financial relief.  We offer a free initial consult.   Just let us know if we can help.
 The original post is titled Household Size on Bankruptcy Means Test , and it came from Portland Bankruptcy Attorney | Northwest Debt Relief .


2 years 6 months ago

The quickest and easiest way to understand why you care about “household size” is to think about the Means Test as a budget.  With the Means Test, the larger the “household size” the greater the amount of money you can set aside for living expenses.  The more you get for living expenses, the less you have left over for creditors.   If you have very little left over, then you increase your chances of qualifying for a Chapter 7 debt discharge.  If, on the other hand,  you have “too much” income left over and available for creditors, then you might not qualify for a Chapter 7; you might have to file a Chapter 13 and pay that left over money to creditors over three to five years.
Of course, there is nothing wrong with filing a Chapter 13.  But, you don’t want to look like you have extra money left over to pay into a Chapter 13 if you really do not.   So, choosing the correct “household size” really matters.   The larger the household size, the greater the income you can make and retain for household expenses.
 HOW IS A DEBTOR’S “HOUSEHOLD SIZE” DETERMINED?
The Bankruptcy Code does not tell say how a court is supposed to make that determination.   As a result, courts have been left with the task to determine what Congress meant when it said “household size”.
Three basic approaches have developed:

  •  Heads on Beds:   The “household” includes anyone living in a debtor’s home at the time he or she files for bankruptcy as part of a household for means test calculation purposes.
  •  IRS “Dependent” Test:  A debtor can claim anyone that is a “dependent” under IRS rule.
  •  Economic Unit:  A person is a member of a debtor’s household if that person is part of a “single economic unit” with the debtor.    So, this approach would include dependents AND, for example, a debtor’s significant other and children as long as they live as a family/economic unit.

 WHICH “HOUSEHOLD SIZE” APPROACH IS CORRECT?
Because the Bankruptcy Code does not provide the method to determine “household size”, it’s up to the courts to decide.  That means a debtor’s household size is based on how the controlling courts have ruled.
In Washington, we have typically followed the “Economic Unit” approach.  Further, other courts within the Ninth Circuit (which includes Washington and Oregon) has adopted the “Economic Unit” approach. See, e.g., In re Kops, 2012 WL 438623 (debtor’s children who lived part-time with debtor are included) (D.Idaho); In re Crow, 2012 WL 8255519 (E.D.CA 2012) (debtor’s boyfriend was included).   Until we hear differently, it appears that the “economic unit” approach is appropriate in Washington.
 WHAT’S THE RESULT OF USING THE “ECONOMIC UNIT” APPROACH?
Fewer and fewer “families” are the traditional husband and wife with 2.5 kids.    The “economic unit” approach allows financial reality to be reflected in the Means Test.  For example, a debtor with a child might live with significant other that has a child by another relationship.   There are four people in that household.  Thus, the “household size” is four.
In the above example, if the significant other has an income, then that income should be included in the Means Test.  They are, after all, a single economic unit.
“Household size” would include anyone that lives full time in the home that is financially dependent on the debtor.   It would include, arguably, any child that lives with the debtor even part-time.  It would include significant others as long as they are financially entwined with the debtor (it might not include the significant other if he/she had separate income, banked separately and otherwise kept their finances separate).  It would include the significant other’s children assuming they all operate as a single economic unit.   Basically, if it looks and acts like a new era “family”, then they are included in the household.
The more “out there” living arrangements might be, the less clear the household size.   Sometimes you just have to make your best argument and see if the court agrees.
 FINAL POINTS
Selecting the right household size can make the different between qualifying for a Chapter 7 or not.   It can make the difference between a three year and five year Chapter 13 Plan.
We are more than qualified to help you work through these issues and others so that you can obtain financial relief.  We offer a free initial consult.   Just let us know if we can help.
The original post is titled Household Size on Bankruptcy Means Test , and it came from Portland Bankruptcy Attorney | Northwest Debt Relief .


2 years 2 months ago

The quickest and easiest way to understand why you care about “household size” is to think about the Means Test as a budget.  With the Means Test, the larger the “household size” the greater the amount of money you can set aside for living expenses.  The more you get for living expenses, the less you have left over for creditors.   If you have very little left over, then you increase your chances of qualifying for a Chapter 7 debt discharge.  If, on the other hand,  you have “too much” income left over and available for creditors, then you might not qualify for a Chapter 7; you might have to file a Chapter 13 and pay that left over money to creditors over three to five years.
Of course, there is nothing wrong with filing a Chapter 13.  But, you don’t want to look like you have extra money left over to pay into a Chapter 13 if you really do not.   So, choosing the correct “household size” really matters.   The larger the household size, the greater the income you can make and retain for household expenses.
 HOW IS A DEBTOR’S “HOUSEHOLD SIZE” DETERMINED?
The Bankruptcy Code does not tell say how a court is supposed to make that determination.   As a result, courts have been left with the task to determine what Congress meant when it said “household size”.
Three basic approaches have developed:

  •  Heads on Beds:   The “household” includes anyone living in a debtor’s home at the time he or she files for bankruptcy as part of a household for means test calculation purposes.
  •  IRS “Dependent” Test:  A debtor can claim anyone that is a “dependent” under IRS rule.
  •  Economic Unit:  A person is a member of a debtor’s household if that person is part of a “single economic unit” with the debtor.    So, this approach would include dependents AND, for example, a debtor’s significant other and children as long as they live as a family/economic unit.

 WHICH “HOUSEHOLD SIZE” APPROACH IS CORRECT?
Because the Bankruptcy Code does not provide the method to determine “household size”, it’s up to the courts to decide.  That means a debtor’s household size is based on how the controlling courts have ruled.
In Washington, we have typically followed the “Economic Unit” approach.  Further, other courts within the Ninth Circuit (which includes Washington and Oregon) has adopted the “Economic Unit” approach. See, e.g., In re Kops, 2012 WL 438623 (debtor’s children who lived part-time with debtor are included) (D.Idaho); In re Crow, 2012 WL 8255519 (E.D.CA 2012) (debtor’s boyfriend was included).   Until we hear differently, it appears that the “economic unit” approach is appropriate in Washington.
 WHAT’S THE RESULT OF USING THE “ECONOMIC UNIT” APPROACH?
Fewer and fewer “families” are the traditional husband and wife with 2.5 kids.    The “economic unit” approach allows financial reality to be reflected in the Means Test.  For example, a debtor with a child might live with significant other that has a child by another relationship.   There are four people in that household.  Thus, the “household size” is four.
In the above example, if the significant other has an income, then that income should be included in the Means Test.  They are, after all, a single economic unit.
“Household size” would include anyone that lives full time in the home that is financially dependent on the debtor.   It would include, arguably, any child that lives with the debtor even part-time.  It would include significant others as long as they are financially entwined with the debtor (it might not include the significant other if he/she had separate income, banked separately and otherwise kept their finances separate).  It would include the significant other’s children assuming they all operate as a single economic unit.   Basically, if it looks and acts like a new era “family”, then they are included in the household.
The more “out there” living arrangements might be, the less clear the household size.   Sometimes you just have to make your best argument and see if the court agrees.
 FINAL POINTS
Selecting the right household size can make the different between qualifying for a Chapter 7 or not.   It can make the difference between a three year and five year Chapter 13 Plan.
We are more than qualified to help you work through these issues and others so that you can obtain financial relief.  We offer a free initial consult.   Just let us know if we can help.
 The original post is titled Household Size on Bankruptcy Means Test , and it came from Portland Bankruptcy Attorney | Northwest Debt Relief .


2 years 6 months ago

I cannot say that I am surprised about the result of a recent poll of budget-conscious consumers conducted by the ACCC. The financial education group’s finding is that the vast majority of Americans do not understand the bankruptcy process. I am not surprised because all too often clients who come in to our bankruptcy law offices are shocked that they have needlessly suffered for years on end when they could have simply followed a few simple steps and gotten a fresh start years before they came in though our doors. All too often it takes the urging of family and friends.
If people had really had the right information in their hands when they first needed it, they could have reclaimed their lives so much earlier. I suppose the one fortunate externality of the increase in bankruptcy filings during our recent depression is that those who filed did so much to remove the stigmas surrounding bankruptcy. After all, when your boss or someone that you really respect has filed it becomes a little easier to file yourself.
I hope that in ten years when the ACCC does another poll, the vast majority of Americans will not regard bankruptcy as a mystery, but as a useful tool for getting back in the financial mainstream after being left out.
 
The original post is titled People Don’t Understand Bankruptcy , and it came from Portland Bankruptcy Attorney | Northwest Debt Relief .


2 years 2 months ago

I cannot say that I am surprised about the result of a recent poll of budget-conscious consumers conducted by the ACCC. The financial education group’s finding is that the vast majority of Americans do not understand the bankruptcy process. I am not surprised because all too often clients who come in to our bankruptcy law offices are shocked that they have needlessly suffered for years on end when they could have simply followed a few simple steps and gotten a fresh start years before they came in though our doors. All too often it takes the urging of family and friends.
If people had really had the right information in their hands when they first needed it, they could have reclaimed their lives so much earlier. I suppose the one fortunate externality of the increase in bankruptcy filings during our recent depression is that those who filed did so much to remove the stigmas surrounding bankruptcy. After all, when your boss or someone that you really respect has filed it becomes a little easier to file yourself.
I hope that in ten years when the ACCC does another poll, the vast majority of Americans will not regard bankruptcy as a mystery, but as a useful tool for getting back in the financial mainstream after being left out.
 
 The original post is titled People Don’t Understand Bankruptcy , and it came from Portland Bankruptcy Attorney | Northwest Debt Relief .


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