Important Terms to Know When You File Bankruptcy

If you’re like most people, you’re relatively unfamiliar with the legal and financial terminology that comes up in a bankruptcy proceeding. Even though your bankruptcy attorney will be able to answer any questions you have about the process, it’s a still good idea to familiarize yourself with some of the terms you’ll be hearing throughout the next few months. The following is a brief guide to some common bankruptcy terms and phrases.

Credit counseling
Before filing a bankruptcy petition, you must attend an individual or group credit counseling course from an approved credit-counseling agency. In a Chapter 7 or Chapter 13 case, you will need to attend an instructional course in personal finances and money management before your debt can be discharged. However, if the bankruptcy administrator in your case finds that there isn’t a sufficient number of approved credit counseling agencies available, you may be exempt from this requirement.

Joint administration
Unless there are conflicts of interest, sometimes, bankruptcy petitioners can choose to file their cases together. This process is known as joint administration, and it allows separate businesses or individuals to combine their resources and work with the same bankruptcy attorney. Joint administration differs from a joint bankruptcy petition in that only a husband and wife are eligible to file a joint petition together.

Means test
If you’re considering file for Chapter 7 bankruptcy, you are required to first complete the means test, under section 707(b)(2) of the Bankruptcy Code. To pass the means test, your aggregate current monthly income over the course of five years must be under $10,950. However, you can also rebut your means test results by proving that there are special circumstances that justify additional expenses or adjustment of your current monthly income.

By calling Cutler & Associates, Ltd. today, we can help stop collection calls, UCC 1 filings, asset sales, and wage garnishments. Our office also offers a free bankruptcy evaluation with an Aurora bankruptcy attorney.