Are you struggling to keep your head above water financially? Are you considering filing for bankruptcy in Littleton, Aurora or Centennial? We are here to help. The last thing you need right now is a bankruptcy attorney who speaks a different language. Legal jargon and bankruptcy terms can be difficult to understand. This is the third and last part in our series of common bankruptcy terms. Read part one (which discusses liens, secured debt, unsecured debt and liquidation) and part two (which explains the difference between dischargeable and non-dischargeable debt). If you are considering filing, contact experienced bankruptcy attorney Barry Arrington to help you through the process and get the best financial fresh start.
What is the Means Test?
When you file for bankruptcy, the bankruptcy court will perform a “means test.” This is a calculation in order to determine whether or not you qualify for a Chapter 7 bankruptcy. Chapter 7 clears all of your debt, whereas Chapter 13 requires the repayment of some creditors. If you are below the median income for Colorado, you will not be required to take the means test (learn more about median income). If you are above the median income, however – you will be required to take the test, which determines whether you would have enough income to repay some of your creditors after your everyday expenses, such as food, housing and transportation. If you fail the means test (if your income is too high), you will not be able to file for Chapter 7. If you a wondering whether or not you would pass the means test, contact bankruptcy lawyer Barry Arrington for a free consultation. He can help you calculate your income to determine whether or not you would pass the means test.
What is a Bankruptcy Trustee?
The bankruptcy trustee is the person who is appointed to administer and oversee your bankruptcy case, on behalf of the court and creditors (learn more about the U.S. Trustee Program). The bankruptcy trustee is required to:
1. Review the bankruptcy petition, papers and documents. These include all the information about your debts, income, property, and overall financial state. You may be required to send the bankruptcy trustee tax returns and pay stubs as they review your case.
2. Verify that the information in your bankruptcy petition is correct. They will reference your financial documents and independent sources to make sure that what you are claiming in your case is truthful.
3. Conduct the creditor’s meeting. After you have filed your bankruptcy case, you will be required to attend the meeting of creditors (learn more about the meeting of creditors). The bankruptcy trustee will preside over this meeting and will ask you questions (while you are under oath) related to your bankruptcy filing.
4. Liquidate your assets which aren’t exempt. In Chapter 7 bankruptcy, you will be allowed to keep certain assets (these are exempt assets). Non-exempt assets will be sold to pay your creditors. The bankruptcy trustee will be in charge of selling and liquidating your assets and repaying certain creditors.
5. Make sure that all proceedings are fair. The bankruptcy trustee has been given a certain amount of power to avoid any transfers of money which may occur. For example, if you transferred property to a family member before filing for bankruptcy in order to avoid losing it, the trustee may try to get the property back in order to distribute it among your creditors.
If you are considering filing for bankruptcy in Arapahoe and Douglas County, and are struggling to understand legal jargon and the bankruptcy process, don’t hesitate to call bankruptcy attorney Barry Arrington, who has years of experience in bankruptcy court.
We hope this list of common bankruptcy terms has helped you. If you are considering filing for Chapter 7 or Chapter 13 bankruptcy in Littleton, Centennial or Aurora, and are confused by the process, contact experienced bankruptcy attorney Barry Arrington for a free consultation at 303-205-7870 or submit the “Get Help Now” form to begin your journey towards financial freedom.