Blogs
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 .
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 .
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 .
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 .
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 .
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 .
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 .
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 .
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 post People Don't Understand Bankruptcy appeared first on Portland Bankruptcy Attorney | Northwest Debt Relief.
A Payday Loan is a small loan that at least in theory, is paid off by the borrower’s next payday. The mechanics of the loan process are as follows: You go to the Payday Lender and give the lender some proof of employment, maybe a copy of your most recent pay stub, and then write a post-dated check to the lender for the amount that you want to borrow plus the fee for the amount they borrow. The lender then gives you the loan amount and agrees to hold your post-dated check until your next payday.
When the loan becomes due, the lender either deposits your check or you agree to hold the check until your next payday for an additional fee. Borrowing money this way gets pricey in a hurry. Lets say you borrow $200 with a charge of $30 but then you roll over the loan one paycheck over for an additional $30 charge. Congratulations, you just paid thirty percent
The Federal Trade Commissions, Bureau of Consumer Protection provides anexcellent example, pointing out that if you borrow $100.00 from a Payday Lender with a charge of $15.00 and roll the loan over once for another $15.00 fee and then pay off the loan, you just paid 391% interest to borrow $100.00 for a month.
The reality is that most Payday Loans are for a range of $300.00 to as high as $500.00 with much higher fees.
What can and can’t a Payday Lender do if you don’t pay back the loan?
One Thing They Can’t Do Is Put You In Jail!
At least they probably can’t!
Why can’t they?
Because when the Payday Lender takes a post dated check it knows that the money is not in the bank.
If you go to a store and knowingly write a bad check, that is a crime, and if a District Attorney can prove that you wrote the check knowing that you didn’t have the money in your bank account you will be fined, and even perhaps go to jail.
This is because of what you intended to do when you wrote the check.
The store owner had every reason to believe the check was good, the Payday Lender does not.
The Payday Lender Knows It Is Taking A Bad Check, and you wrote the check with every intent on paying back the loan.
It is unlikely the a DA will ever accept charges for a bad check under these circumstances.
I should point out that if someone were to write a check to cover a Payday Loan and then immediately close the checking account, that the DA might look at the issue a little more closely.
What Can A Payday Lender Do?
- They can call you to demand payment. Repeatedly and relentlessly!
- They can simply attempt to cash the check, or if they have authority to automatically withdraw the money, they will, with the likely result of overdrawing your checking account.
- They can sue you, and get the amount owed, court costs interest and attorney’s fees.
- They can garnish your wages once they have a judgment.
- They can turn the debt over to a debt collector.
Very rarely does someone go to a Payday Lender as their first borrowing source. Payday loans are often a sign that an individual is in a bad financial situation.
Payday loans can be discharge in bankruptcy.
Speaking with an experienced bankruptcy attorney should be considered.
The post Pay Day Loans and Bankruptcy appeared first on Portland Bankruptcy Attorney | Northwest Debt Relief.
Updated daily, this blog will keep you informed on the latest bankruptcy news! 
Learn more about how Bankruptcy works and what you need to know.