When filing a bankruptcy, your household size is important. The number of individuals living in your household can have an impact on what type of bankruptcy for which you qualify. One of the determining factors for whether an individual will qualify for a Chapter 7 or a Chapter 13 is your household income. If your household income is over a certain amount for your household size, you may not qualify for a Chapter 7.

The median income for your state is determined by household size. For example in Minnesota the median income for a household size of one is $48,876, but for two people it is $64,454. Making sure everyone in your household is accounted for is essential in your bankruptcy case. It is very important to let your attorney know about all individuals who are residing in your home. For example, you will want to let your attorney know if an elderly parent lives with you. Also you should inform your attorney about any children who are college students who live with you for at least the summer months. Making sure your attorney has the right information can have a great impact on how your case proceeds.

Although it is possible for one to discharge their student loan payments, it is very difficult to do so and rarely happens.  In order for you to attempt to discharge your loans you must first file a Complaint to Determine Dischargeability with a bankruptcy court. Once you have done this you can either try and represent yourself or hire an attorney to represent you (which is recommended) in proving it would be an undue hardship for you to pay back your student loans.  The courts will then use one of few tests to decide whether or not it is truly an undue hardship for you. Two of the more popular choices of tests are the Brunner Test and the Totality of the Circumstances Test.

In order to prove undue hardship under the Brunner Test, you must meet all three of its requirements.  The first requirement is that you prove you and your dependents will not be capable of living within the basic standard of living if you must pay back your loans.  The court will look at your current income and your monthly necessary expenses (groceries, rent, etc.) to determine whether or not the addition of paying off your student loans would push you below the standard of living.  The second requirement is whether or not your financial situation will stay consistent for a majority of the time spent paying off your student loans.  If it doesn’t look like you’re financial situation will improve at any time during the period of repayment, you may be able to discharge the loans.  The final requirement for this test is to prove that you had made an honest effort in trying to pay off your student loans.

Under the Totality of the Circumstances Test there are no requirements that you must reach like the previously mentioned test.  However, the court will look at similar factors to determine whether or not paying back your loans will be an undue hardship for you. Instead of just looking at the three previously mentioned areas (possibility of poverty, consistency of financial situation, and honest effort), they will look at all possible factors that are pertinent to your case specifically.  Keep in mind that the court systems are not limited to these two tests alone, there are other tests that can be used by the courts.  If you’re unsure of what test will be used in your area, get in touch with a local bankruptcy attorney to find out.

One thing to keep in mind is that most courts will either discharge all of your loans or they won’t discharge any at all.  There are few courts that will only discharge a percentage of your student loans.  If your loans aren’t discharged, two things could happen.  If you filed under Chapter 7 bankruptcy, you will have to repay your loans back as previously planned.  You could call the facility your loan is through, though, and ask to lower your monthly payment.  If you filed under Chapter 13, you may have more options open to you in terms of lowering your monthly payment other than just calling the facility.  However, you must keep in mind that even when your monthly payments have been reduced, after the original time period has passed for you to complete payments you need to pay off whatever is left.  So if you were on a 10 year payment plan and had your payments reduced, by the time the 10 years is up you will have money left over to pay still (ex. $500 left over).  With that being said, just remember to keep all of your options open before filing a Complaint to Determine Dischargeability, such as speaking with a loan counselor.

https://www.nolo.com/legal-encyclopedia/student-loan-debt-bankruptcy.html

Going through bankruptcy can be an uneasy emotional process for you.  You can be left wondering how bankruptcy will affect you, your family, your finances, and even your credit.  There is no doubt that filing bankruptcy has a negative impact on your credit.  After all, it is something that will remain on your credit report for about 7-10 years.  This doesn’t mean you can’t improve your credit, though.  The following are some things you can do it improve your credit.

First things first, look over your credit report to see where you are at.  Once you know what your credit score is you can set a credit score goal and begin the process in building your score.  One of the biggest (and easiest) things to keep yourself on track is to pay your bills on time.  About 35% of your credit score is composed of your payment history.  This includes your phone bill, internet bill, car bill, etc.  Now this next step might seem a bit intimidating given the bankruptcy process you just went through, but you should consider getting a credit card account.  Much like your bills, paying your credit cards off on their due dates will help to improve your credit, you don’t want to go up and beyond your limit, though.  Try to use your card as little as often, or for lower cost items and then make sure to pay the card off by the due date. Another thing to remember is that you do not want to close out on one.  This will damage your credit more than benefit it.  All this will do will reduce “the amount of credit you have available to you.”  If you feel you are not going to make payments in a timely manner, just shred the card and leave the account open.

After some time has passed since your bankruptcy was discharged, you should look into getting a loan for some type of property such as a car. This doesn’t mean go buy the most expensive car on the lot, instead you should focus on a car that you know is in your price range.  A car you’re confident you can pay off.

By following these tips, you are giving yourself a higher chance of improving your credit score.  Much like a workout, you are not going to see results over night.  Building up your credit after filing for bankruptcy will take time; but as long as you’re patient and are aware of your financial limits, you should be able to make some progress in achieving your credit score goal.

https://money.msn.com/credit-rating/article.aspx?post=f8f62f4a-9f7b-40e8-ad22-bb88f2399a77

Making the decision to file for either divorce or bankruptcy alone can be tough, but when you’re filing for both you may be lost as to which should be filed first.  There is no exact answer to this question because one person’s situation could greatly differ from next.  Sometimes it’s more logical for a couple to file a joint bankruptcy in order to lessen the blow of dividing marital assets, other times it might make more sense to file bankruptcy after divorce for financial reasons.  Before you make the decision, consider which type of bankruptcy you are going to file.  Are you filing under Chapter 7 or Chapter 13?

Filing Chapter 7 can be a quicker process than filing Chapter 13, so it might be more appealing to those who prefer filing bankruptcy before divorce.  Under this type of bankruptcy nonexempt property will be sold and whatever payment received from the sales will be given to creditors.  Any remaining debt you have will be discharged.  Before considering this type of bankruptcy, keep in mind that you must pass a means test to qualify.  After looking at you and your spouse’s income, the court may find your incomes too high for Chapter 7.  Thus, it may be necessary to wait until after divorce.

Filing under Chapter 13 usually lasts between 36-60 months, so it might be wise to file for divorce before you file for this type of bankruptcy.   Although the amount of time this process takes can be off putting, the plus is that you can protect your nonexempt properties from being sold.  This type of bankruptcy will create a feasible payment plan for the debtor.  The payment plan will be calculated based off of your income, amount of debt accrued, and how much money is necessary for monthly expenses.

One last thing to make note of is that there are marital debts you will not be able discharge regardless of which chapter of bankruptcy you file.  Those debts include both child support and spousal maintenance.  These debts will also be the first to be paid off due to their priority over any other unsecured debt you may have.

So while you’re trying to make a decision as to whether you should file bankruptcy or divorce first, keep in mind what type of bankruptcy you’d like to file and which seems more logical for your situation.

https://www.digitaljournal.com/pr/1412583