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CalAttorney2
CalAttorney2, Attorney
Category: Bankruptcy Law
Satisfied Customers: 10244
Experience:  Civil litigation attorney for individuals and businesses.
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If your income falls below the means test, but you have

Customer Question

If your income falls below the means test, but you have 23,000 dollars in your bank account. I want to file Chapter 13!! Will I just have to make payments for three years on the 23,000 I have in the bank account.
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  CalAttorney2 replied 2 years ago.
Unfortunately, without regular income you are not going to qualify for a Chapter 13 (Chapter 13 relies on regular income of the debtor to make payments under the plan). See: http://www.nolo.com/legal-encyclopedia/chapter-13-bankruptcy-eligibility-29738.htmlI highly recommend that if you are considering filing bankruptcy that you retain a bankruptcy attorney to represent you. Bankruptcy planning and filing is much more detailed than simply completing the forms and having a knowledgeable attorney help you in filing your bankruptcy can greatly improve your post-discharge financial position (making the relatively small fee that you pay for a bankruptcy attorney a very good investment). You can find local attorneys using the State and local Bar Association directories, or private directories such as www.AVVO.com; www.FindLaw.com; or www.Martindale.com (I personally find www.AVVO.com to be the most user friendly).
Customer: replied 2 years ago.
I have regular income, but will my 23,000 be affected in a chapter 13.
Expert:  CalAttorney2 replied 2 years ago.
Yes it will be.
The basic consideration in forming a chapter 13 plan is ensuring that your creditors receive at least as much in your chapter 13 as they would in a liquidation (or chapter 7).
Customer: replied 2 years ago.
Oh okay so in the since youll be paying back all the monthly savings in a payment plan injunction with what ever disposable income you have left over.
Expert:  CalAttorney2 replied 2 years ago.
Generally, yes. But again, bankruptcy plans are very fact specific, I would highly recommend speaking with a local bankruptcy attorney so that you can get the most out of your bankruptcy petition (you really will maximize your post-discharge position afterwards (and if it is possible to file a Chapt. 7 liquidation plan in lieu of a Chapt. 13 payment plan, you generally will fare better - a long pay off plan will hold you up for a long period of time financially while a short term liquidation will be over quickly and you will be back to rebuilding your financial portfolio much faster). A local attorney will help you make the most of this decision based on your actual financial picture (debts, assets, and liabilities).
Customer: replied 2 years ago.
Oh okay. So basically to qualify for chapter 7 you have to make sure all you expenses in conjunction with your income falls under the means test
Expert:  CalAttorney2 replied 2 years ago.
Correct, you need to "meet" the means test - this can be done in a few ways (sometimes the means test can be manipulated in certain ways - once again an attorney can help you with this, and oftentimes timing your bankruptcy can help you with matching your filing date to your income and debts so that your filing matches).