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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 19627
Experience:  B.A.; M.B.A.; J.D.
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I currently have approx. $80K in credit card debt, and have

Customer Question

I currently have approx. $80K in credit card debt, and have been in arrears with several accounts since May 2015. I have only SS income of $1025.00/mo., although I plan to return to work within the next few months. My only asset is approx. $1,100.00 in a savings acct. An accountant recently advised me to declare discharge bankruptcy. What do you think?
Submitted: 2 years ago.
Category: Bankruptcy Law
Expert:  Phillips Esq. replied 2 years ago.

If your only asset is $1, 100.00 in savings account and your only income is from Social Security benefits, then you would be eligible to file for Chapter 7 to erase your credit card debts and to ensure that once you start work, the credit card companies will not file lawsuit against you and then seek to garnish your wages.

You would be eligible to file for Chapter 7 bankruptcy protection, if you meet the Means test—the income test. If your income is equal to or less than the current income guidelines for your family size in your state, you would be eligible to file for a Chapter 7 bankruptcy all things being equal. The income used in calculating the Means test is the income for the 6 months before the filing of the bankruptcy petition. This means that if you are filing for bankruptcy protection this month, September 2015, the income that would be used is your income from March 2015 to August 2015. If you are filing next month, October 2015, the income that would be used in the Means Test calculation would be the income from April 2015 to September 2015, etc. The good news here is that your Social Security benefits are not considered income in the bankruptcy context.

Click on the link below to see the current income guidelines for your state:

http://www.justice.gov/ust/eo/bapcpa/20150515/bci_data/median_income_table.htm

The filling fee for Chapter 7 is $335.00. You may able to waive this filing fee if your income is 150% below the current poverty guidelines. Click here for current poverty guidelines:

http://www.uscourts.gov/bankruptcycourts/resources.html

You must receive budget and credit counseling from an approved credit counseling agency and obtain a Certificate of Credit Counselling to be filed with your bankruptcy case. The agency will review possible options available to you in credit counseling and assist you in reviewing your budget. Different agencies provide the counseling in-person, by telephone, or over the Internet.

It is usually a good idea for you to meet with an attorney before you receive the required credit counseling. Unlike a credit counselor, who cannot give legal advice, an attorney can provide counseling on whether bankruptcy is the best option. If bankruptcy is not the right answer for you, a good attorney will offer a range of other suggestions. The attorney can also provide you with a list of approved credit counseling agencies, or you can check the website for the United States Trustee Program office at http://www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm

After your case is filed, you must complete an approved course in personal finances. This course will take approximately two hours to complete. Your attorney can give you a list of organizations that provide approved courses, or you can check the website for the United States Trustee Program office at http://www.usdoj.gov/ust/eo/bapcpa/ccde/de_approved.htm

Consult a local bankruptcy attorney for further explanations of your rights and responsibilities.

The sites below are good resources for finding bankruptcy attorneys in your area:

http://www.nacba.org/

http://www.consumeradvocates.org

http://www.justia.com/

http://www.lawyers.com/

If you cannot afford an Attorney, then the next best alternative will be to use bankruptcy petition preparer. Bankruptcy petition preparers prepare bankruptcy forms but they cannot give you legal advice because they are not attorneys. You can do a search on Google to find bankruptcy petition preparers.