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Chapter 7 Bankruptcy and the Means Test

Determining  whether or not to file for bankruptcy can be a difficult and drawn out decision. There are several factors that someone should consider when making this decision, and experienced professionals should be on hand to assist in the process. The two main types of bankruptcy are Chapter 7 bankruptcy and Chapter 13 bankruptcy.

Chapter 7 bankruptcy can allow an individual to dispose of their debt at a more rapid pace than Chapter 13 bankruptcy. Chapter 7 is a form of bankruptcy protection that is usually classified as liquidation bankruptcy. A person’s assets which are considered non-exempt will be sold, liquidated, and the profit from those sales will directly benefit creditors associated with the filing.

Assets are categorized as exempt and non-exempt items. Common items that are deemed exempt, which means they cannot be liquidated in the bankruptcy filing, include earned damages, cars, and clothing. Non-exempt items can include stocks, second vehicles, and cash, but these are ultimately determined by an appointed bankruptcy trustee.

If an individual determines that Chapter 7 bankruptcy protection is the right course for them, they must first pass the means test in order to be considered for this type of protection. If an individual earns an income that is considered to be lower than the median income of their state, then they do not have to pass the means test and can proceed with the Chapter 7 bankruptcy filing. All other individuals must pass this test before they can file.

The means test is a comparison test in some regards, as it compares an individual’s earned monthly income to the state’s average income. If the income is determined to be higher than the median, a person’s net income is then calculated. If the net income of an individual can be used to successfully pay off debt within the five year time frame associated with Chapter 13, then the individual is not allowed to file for Chapter 7 bankruptcy. If the net income could not complete this requirement, then the person filing will then be allowed to continue with the Chapter 7 bankruptcy filing.

Chapter 7 bankruptcy filed by 38 Studios LLC

The video-game company that is owned by the retired Boston Red Sox Pitcher, Curt Schillings, has filed for Chapter 7 bankruptcy protection in a Delaware bankruptcy court.

Schillings formed the company after his years playing professional baseball came to an end. The company was moved from Massachusetts to Rhode Island in 2011 after bonds from the state were acquired. The bonds were all spent, and 38 Studios LLC is said to owe $150.7 million to it’s numerous creditors.

The company will liquidate all of it’s assets, in order to begin paying back creditors. Some of those assets that will be up for sale include: software, patents, and video-game assets.

Please contact the Chapter 7 bankruptcy lawyers of Greenway Bankruptcy Law, LLC by calling (205) 324-4000 if your company is looking into filing for Chapter 7 bankruptcy protection.

Nadya Suleman seeks Chapter 7 bankruptcy protection

Nadya Suleman, who has been deemed ‘Octomom’ by the media, has sought Chapter 7 bankruptcy protection. The single mother of 14 has been trying to support her large family on food stamps and Social Security disability checks.

Her debt has rapidly increased, and she owes close to $1 million to several different creditors. Suleman listed her assets at $50,000 and claims that she has no way of paying this large amount of debt on her own.

Suleman believes that this filing is the best thing for her and her children at this time. She is hopeful that she will be able to provide for her family after emerging from bankruptcy.

If you are considering filing for Chapter 7 bankruptcy protection, you need experienced representation on your side. Please contact the Birmingham Chapter 7 bankruptcy lawyers of Greenway Bankruptcy Law, LLC, by calling (205) 324-4000 today.

Another former professional sports player seeks bankruptcy protection

Yet another former professional sports player has sought bankruptcy protection. Warren Sapp, a former defensive tackle for the National Football League, is the most recent ex-player to file for bankruptcy. He joins the likes of Allen Iverson, Dennis Rodman, and Terrell Owens.

Warren Sapp was employed by the NFL for 13 years and played for the Tampa Bay Buccaneers and the Oakland Raiders during that time. He has recently fallen behind on several payments, and filed for Chapter 7 bankruptcy in a Florida court on March 30. His debts total $6.7 million, which includes a large amount of unpaid child support to the mothers of his four children.

He has announced that his assets are currently at $6.45 million, and his monthly income averages $115,881. He is currently employed by the NFL Network as an analyst, and with his contract ending in August he is not sure if it will be renewed.

Please contact the Birmingham Chapter 7 bankruptcy lawyers of Greenway Bankruptcy Law, LLC by calling (205) 324-4000 if you or someone you know has questions regarding the Chapter 7 bankruptcy process.

Actor Gary Busey files for Chapter 7 bankruptcy

Yesterday, actor Gary Busey filed for Chapter 7 bankruptcy in California.  The 67-year old starred in movies for 45 years before appearing on reality television shows like “Celebrity Rehab,” “Celebrity Apprentice,” and “Celebrity Wife Swap.”

According to Busey’s Chapter 7 filing, he owns less than $50,000 in assets and has between $500,000 and $1 million in debt.  Creditors named in the actor’s bankruptcy include UCLA Medical Center, the IRS, Wells Fargo, L.A. County Waterworks District, and several attorneys.

A statement from Busey’s publicist reads, “As with many great institutions, i.e., General Motors, American Airlines, and others who have utilized the strategic business plan of bankruptcy, Gary’s filing is … the start of a new and clear path toward peace, happiness, and success with his career.”

If you or someone you know is considering filing for personal bankruptcy, contact the Birmingham Chapter 7 bankruptcy lawyers of Greenway Bankruptcy Law, LLC at (205) 324-4000 to learn more about how filing for Chapter 7 bankruptcy can benefit your future.

Solar-power equipment manufacturer files for Ch. 7

Sterling Energy Systems Inc., a manufacturer of solar-power equipment, recently filed for Chapter 7 bankruptcy.  The company is based in Scottsdale, Arizona.

Executives with Sterling Energy Systems say that rising costs, low demand, and trouble raising funds has hurt their business.  Sterling reportedly tried to find a buyer, but did not find anyone and decided to file for bankruptcy instead.  Under Chapter 7 bankruptcy, the company will be able to eliminate their debts.

The company’s Chapter 7 filing lists between $1 million and $10 million of assets and between $50 million and $100 million in debts.

Several other solar-power companies have recently filed for bankruptcy as the industry struggles.

If you or someone you know has questions about being eligible to eliminate your debts through Chapter 7 bankruptcy, contact the Birmingham Chapter 7 bankruptcy lawyers of Greenway Bankruptcy Law, LLC by calling (205) 324-4000 today.

Personal bankruptcies down nationwide

Last month, a total of 108,517 personal bankruptcies were filed nationwide.  September’s personal bankruptcy filings were 4 percent lower than a month before and 17 percent lower than a year before.

Furthermore, the number of personal bankruptcies filed in the U.S. from the beginning of the year through September was 10 percent lower than the number of personal bankruptcies filed in the same time period last year.

70 percent of personal bankruptcies filed in September were Chapter 7 filings and 30 percent were Chapter 13 bankruptcies.

Data comes from the American Bankruptcy Institute and National Bankruptcy Research Center.  Samuel Gerdano, executive director of the ABI, says, “Total consumer filings for 2011 will be less than 2010.”

Contact the Birmingham personal bankruptcy attorneys of Greenway Bankruptcy Law, LLC at (205) 324-4000, if you or someone you know has questions about filing for personal bankruptcy in Birmingham.

Media personality files for Ch. 7 bankruptcy

Earlier this month, “Troubleshooter” Tom Martino filed for Chapter 7 bankruptcy.  Martino hosts television and radio shows on consumer-advocacy based in Denver, Colorado.

Martino says that all of his debt is related to commercial real estate projects and that he has zero consumer debt.  The majority of the 47 creditors listed in the bankruptcy were banks that Martino had real estate loans from and had failed.

The Chapter 7 bankruptcy filing lists $78.6 million in debt and $1.37 million in assets.  Martino said, in regards to the filing, “There are so many people in this same boat.  You’ve got millions of dollars in lost value and all of a sudden you can’t refinance your loans and you are just upside down.”

To learn more about the Chapter 7 bankruptcy process, contact the Birmingham Chapter 7 bankruptcy lawyers of Greenway Bankruptcy Law, LLC at (205) 324-4000 today.

Toni Braxton’s debts discharged in Chapter 7 bankruptcy

Grammy award-winning singer Toni Braxton recently had many of her debts discharged under Chapter 7 bankruptcy.

The singer filed for bankruptcy last September. The Chapter 7 filing listed $18.3 million in debts and $1.6 million in assets.

Under Chapter 7 bankruptcy, certain types of debts are eligible to be discharged. An order from the U.S. Bankruptcy Court in Los Angeles states that most of the singer’s eligible debts were discharged. Some taxes, student loans, criminal fines, and domestic-support payments are not eligible for discharge.

With the order, Braxton is no longer responsible for paying off certain debts. In addition, creditors are prevented from taking action against the singer for repayment.

If you have questions about what qualifies as a dischargeable debt and what does not, contact the Birmingham dischargeable debt lawyers of Greenway Bankruptcy Law, LLC at (205) 324-4000 to speak with one of our experienced bankruptcy attorneys.

More government employees eligible to choose chapter 7

Many governmental entities across the country, at both the state and local level, are struggling to balance their budgets after the economic crisis.  In an attempt to  balance budgets, many government workers are experiencing salary deductions, higher costing benefits, and wage freezes.

Previously, many public workers were unable to qualify for chapter 7 bankruptcy because their salaries were too high.  However, with these salary deductions, this no longer seems to be the case.  “Traditionally, public employees were not eligible for Chapter 7 Bankruptcy due to the fact that they had good salaries and typically didn’t have to pay much toward their benefits … In the current fiscal crisis, that is changin,” said one bankruptcy expert.

If you or someone you know has questions about chapter 7 bankruptcy eligibility, contact the Birmingham chapter 7 bankruptcy attorneys of Greenway Bankruptcy Law, LLC at (205) 324-4000 to learn more about the process today.

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Greenway Bankruptcy Law, LLC All rights reserved. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code. The following language is required pursuant to Rule 7.2, Alabama Rules of Professional Conduct. No representation is made that the quality of legal services to be performed is greater than the quality of legal services performed by other lawyers. This web site is designed for general information only. The information presented at this site should not be construed to be formal legal advice nor the formation of a lawyer/client relationship.

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