Call Now!
Call Us 414-326-9231 608-260-7133 Text Us 414-326-4709
${site.data.firmName}${SEMFirmNameAlt}

Looking at the reasons behind the 2016 decrease in Chapter 7 bankruptcy filings, P.2

In our last post, we began looking at the decrease in bankruptcy filings over the last six months. As we noted, the decrease was primarily in Chapter 7 filings, and there are good reasons for this. Commentators have said that there has been significant improvements in the economy, such as a decrease in unemployment, improvement in the real estate market, and an increased availability of credit.

All of this means that debtors are earning more money and may be under less pressure from creditors. This has probably resulted in fewer people needing to file for bankruptcy. In addition, more debtors are probably finding that they do not qualify for Chapter 7 bankruptcy because of the eligibility requirements. 

Chapter 7 bankruptcy involves very specific financial requirements, and these requirements will automatically bar certain debtors. Financial eligibility is based on the current monthly income of the state in which the filing is made. If the debtor's current monthly income is more than the state median, the debtor must submit to the so-called means test to determine whether the filing is "presumptively abusive." If the debtor's aggregate monthly income over five years--excluding certain expenses--exceeds a certain amount, the filing is presumed to be abusive. This presumption may be rebutted by demonstrating that there are special circumstances which justify adjustments to the calculation. If the debtor is able to prove such circumstances, he or she may be able to overcome the presumption of abuse. Otherwise, the case will be dismissed or converted to a Chapter 13 bankruptcy.

In pursuing Chapter 7 bankruptcy, it is important to work with an experienced bankruptcy to submit an accurate filing and to receive guidance and advocacy throughout the process. This is particularly important in cases where a debtor is denied a Chapter 7 filing and is forced to convert to a Chapter 13 filing or has his or her filing dismissed altogether. 

No Comments

Leave a comment
Comment Information
Email Us For A Response

Free Case Evaluation

* indicates required field

Miller & Miller Law, LLC
  • VISA
  • Master Cards
  • Discover
Milwaukee Office map Madison Office map Kenosha Office map

633 W Wisconsin Ave, Suite 500
Milwaukee, WI 53203

Phone: 414-312-6581
Fax: 414-277-1303
Milwaukee Office

2810 Crossroads Drive
Suite 4001
Madison, WI 53718

Phone: 608-260-7133
Madison Office

6123 Green Bay Road
Suite 210
Kenosha, WI 53142

Phone: 262-326-1669
Kenosha Office

Appleton Office
4321 W. College Ave.
Suite 200
Appleton, WI 54914

Phone: 920-280-3838
Appleton Office

Brookfield Office
200 S. Executive Drive
Suite 101
Brookfield, WI 53005

Phone: 262-261-0665
Brookfield Office

Glendale Office
6333 N. Green Bay Avenue
Glendale, WI 53209

Phone: 414-973-8662
Glendale Office

Fax: 414-277-1303 - We also have offices in Appleton, Glendale and Brookfield to better serve you.