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Bankruptcy Means Test If you’re trying to file a chapter 7 bankruptcy, you must first qualify. One of the qualifications is that you must pass the means test. The means test is a mathematical formula designed to prohibit those from filing a chapter 7 bankruptcy if they have the ability to repay a portion of+ Read MoreThe post Making Changes To Pass The Bankruptcy Means Test appeared first on David M. Siegel.
$5,000? $50,000? $500,000? How much debt do you need to have before it makes sense to file bankruptcy?
There is No Magical Amount!
There is no particular debt limit that you must have in order to file a Chapter 7 bankruptcy. It really depends upon what is going on in your life. Life is not simple. Some clients find themselves with good income, but are suddenly single parents with little disposable income. Other clients are living on only social security income and have little debt.
A Little Debt....
I once had a client who have wanted to file a bankruptcy with only $4000 debt. In virtually all situations, this is not enough debt to justify filing bankruptcy. However, a perfect world storm caused this case to be filed. First, income was almost non-existent. Usually, this is not a problem once the creditor realizes the issue and will settle the debt for less than what is owed and what the client can afford to pay. In this case, however, the creditor was stubborn, which made it stupid. It wanted to be paid 100% and continued to proceed with a lawsuit, hoping to obtain a a judgment and a 25% wage garnishment. No amount of persuading the creditor to take less worked.
Or, A lot of Debt ....
I have had other clients who had $400,000 worth of debt and were fighting against filing a Chapter 7 and getting a fresh start.
The Key: Can You Make A Dent in Your Bills if You Attacked It for 6 Months?
You have to determine whether or not you feel you can either pay your debt back over time or whether or not you need a fresh start to be able to survive.
I like the 6 month rule. If you attacked your debt for six months, could you leave a dent? Or, would you hardly leave a dent, instead you are just simply paying minimum payments, primarily paying interest. If you don’t see your debt going down, then bankruptcy is probably a good solution for you to get out of debt once and for all and get back on your feet. If, on the other hand, you feel you have the ability to make a significant dent in the debt, I think you should first try this approach.
Photo Credit: Alan Cleaver at Flickr
When you apply for a student loan, you may be required to get a consigner. That person, usually a relative, is doing a good deed for you in helping you get the loan.
Here are some things you need to know about what it means for you – and for the cosigner.
Cosigner Liability
- The cosigner is 100% liable for repayment of the student loan.
- If you don’t make payments when they are due, the cosigner’s credit report will show the delinquency.
- If the lender sues you for nonpayment, the cosigner will also be sued.
- If the student loan lawsuit goes to judgment, the cosigner may be subjected to wage garnishment, bank account freezes, and a lien on his or her real estate.
Cosigner Release
- Unless the cosigner is released by the lender, liability remains intact.
- An agreement signed by the cosigner and anyone else does not affect liability unless the lender also signs the agreement.
- Each lender has different rules to releasing a cosigner from liability. For example:
- Sallie Mae states that, “[T]o qualify for cosigner release, the borrower must have successfully completed school, made 12 consecutive on-time principal and interest payments for Smart Option Student Loan or Career Training Smart Option Student Loan (other Sallie Mae private loan products may have different minimum on-time principal and interest payment requirements, please contact us for details at 1-888-272-5543), meet age of majority requirements, and meet the underwriting requirements when the request for cosigner release is processed. The borrower’s account must remain current until the request for the cosigner release is processed. The borrower must be a U.S. citizen or permanent resident at the time the cosigner release is processed.”
- Wells Fargo says that, “The student borrower may request that the cosigner be released from the loan after the first 24 consecutive monthly payments are made on time and the student borrower meets certain credit requirements. In the event of the death or total and permanent disability of the student borrower, the loan can be forgiven and the cosigner won’t be responsible for repayment. Please note that the student borrower must be a U.S. citizen to be eligible for cosigner release.”
- Usually, the student must apply for the release.
- You can get the cosigner off your student loan if you refinance or consolidate your student loans with a new lender.
Beware The Dangers Of Student Loan Cosigners
The landscape is difficult for those who cosign for student loans, as well as for those who need someone to help them qualify for financing.
If you understand the risks and how to minimize them, you may find that a cosigner can provide much needed security with a minimum of hassle.
Book Free Initial Consultation
Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankruptcy Cases and Mortgage Modifications (305) 891-4055
The answer to this is no…and yes. In Arizona, wedding rings are exempt up to $2,000. This means that for both you and your spouse, you can exempt a total of $2,000 of the value of your wedding rings. For most people, this is more than enough to keep their rings safe. But what if, during better economic times, you purchased more expensive jewelry? Technically, the Trustee can have you turn over your jewelry. Does this happen often? No. Could it? It could. The post Can the Trustee Really Take My Wedding Rings?! appeared first on Tucson Bankruptcy Attorney.
Bankruptcy Petition Can Be Amended Your bankruptcy petition can be amended after you file. This is often the case when someone forgets to list a particular creditor. The creditor may not have shown up on the credit report or the debtor simply misplaced a bill from that creditor. In a chapter 13 case, the bankruptcy+ Read MoreThe post Can My Bankruptcy Petition Be Amended After Filing? appeared first on David M. Siegel.
I am pleased to announce that I have updated my bankruptcy website! This website is meant to offer better content to clients and potential clients in a clean and crisp format. I am very happy that the website is responsive to viewing on mobile devices as well! Please check it out and let me know what you think!
The website was designed by Rod Silver of Artco.
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.