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Will Filing for Bankruptcy Eliminate Your Medical Debt?

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bankruptcy The problem of excessive and unsustainable medical debt in the U.S. isn’t actually a problem: it’s a full-blown epidemic. A study by the Centers for Disease Control and Prevention (CDC) found that 1 in 3 Americans are burdened by medical bills. And research by NerdWallet Health revealed that medical debt has now earned the dubious distinction of being the number one cause of bankruptcy filings in the nation.

If you’re anxiously watching medical bills pile up — and feeling the heat from increasingly aggressive hospital, doctor and healthcare network collection tactics — then filing for bankruptcy might be a viable option. This is because medical bills are viewed by the courts as general unsecured debts. This is not the case with some other debts, such as child support, alimony, restitution due to a criminal conviction, or student loans. These will remain on the books even after filing for bankruptcy (some people may be able to get relief from their student loan debts if they can demonstrate financial hardship, but that is part of a separate filing). 

Chapter 7 Means Test: The Basics

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chapter 7 means testBefore you can file for Chapter 7 bankruptcy, you must pass what is known as the “Chapter 7 means test.” This an income-based formula that is designed to prevent high-income earners from filing for Chapter 7 bankruptcy. Instead, they must file for Chapter 13 bankruptcy, which obligates them to repay some of their debts via a highly-structured repayment plan vs. wipe out their debts altogether. Note also that Chapter 7 is only available for individuals, not businesses.

About the Chapter 7 Means Test

The first and easiest step in the Chapter 7 means test is to note your annual income, and determine whether it is less than that of a similarly-sized household your state. Each state has its own median income levels. For example, here are the current levels for Missouri:

  • 1 Person Household: annual median income of $40,994
  • 2 Person Household: annual median income of $51,421
  • 3 Person Household: annual median income of $57,468
  • 4 Person Household: annual median income of $72,230
  • 5 Person Household: annual median income of $80,330
  • 6 Person Household: annual median income of $88,430
  • 7 Person Household: annual median income of $96,530
  • 8 Person Household: annual median income of $104,630
  • 9 Person Household: annual median income of $112,730
  • 10 Person Household: annual median income of $120,830

If your household’s annual median income as equal to or lower t , and are eligible to file for bankruptcy.

What if You Fail the Chapter 7 Means Test?

If you fail the Chapter 7 means test, then determining your eligibility is more complex. You must identify your average monthly disposal income – which is your income minus eligible expenses – for the six months prior to filing. If your disposal income exceeds a minimum threshold, then you cannot file for Chapter 7 bankruptcy. The U.S. Government has a form available online to help you calculate and determine eligibility.

If You Pass the Chapter 7 Means Test…

You should NOT automatically decide to file for Chapter 7 because you pass the Chapter 7 means test. All that passing does is give you an additional option that may – or may not – be in your best interest. Remember, filing for Chapter 7 (or any other Chapter) bankruptcy is a major step, and there are significant, lasting consequences. The smartest and safest thing you can do is get the accurate facts you need to make an informed decision.

Learn More

To learn more about filing for Chapter 7 bankruptcy, and for additional details on the Chapter 7 Means test, contact the Law Office of Charles Huber today.

How to Stop Wage Garnishment ASAP

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wage garnishmentHaving your wages garnished is not just alarming and infuriating, but it’s essentially counter-productive because it impedes your ability to pay down your debts. Like almost everyone, you depend on your salary to maintain your standard of living and support your family. Having a creditor cut into that cash lifeline puts your financial health and future at risk. That’s the bad news.

The good news is that you can do something that wage garnishing creditors categorically don’t want you to do: stop them ASAP. Below are the steps to follow.

  1. Identify who is garnishing your wages, why, and for how much.

You have every right to know exactly who is garnishing your wages, and why they’ve taken such a dramatic action. If you can’t piece this story together from the documents you have in your possession, contact your payroll department and ask them for details, or speak with your bank. If you didn’t receive a summons and complaint outlining the creditor’s allegations against you, then you can identify who was served by contacting the court where your case was filed (typically the Superior or District Court in the county where you live).

And while you’re digging into the details, confirm precisely how much is being garnished per paycheck. Keep in mind that each state has its own laws governing how much can be garnished. For example, in Missouri creditors may garnish the lesser of the following:

  • 25 percent of a debtor’s disposable earnings, or
  • 10 percent of a debtor’s disposable earnings if they are the head of a hold, or
  • The amount by which a debtor’s weekly disposable earning exceeds 30x the Federal hourly minimum wage (currently $7.25/hour).
  1. Find and hire a qualified attorney.

The web can be a source of valuable information (as you’re demonstrating right now by reading this article). But it’s not a substitute for proper legal counsel, which can only be provided by an attorney. Find one in your area that has deep experience in bankruptcy filings, and learn about your options — specifically regarding filing for Chapter 7 or Chapter 13 bankruptcy.

Remember that time is of the essence! The wage garnishment will not stop otherwise. What’s more, if you file for Chapter 7 bankruptcy protection within 90 days of the wage garnishment commencing, you may be allowed to recover them.

  1. File for bankruptcy.

If your attorney advises you to file for bankruptcy and you agree with this recommendation, then as noted above, do so without delay by providing your attorney with the required documentation (including pay stubs, tax returns, debt collection notices, etc.). You’ll receive a case number. Provide this to your bank or payroll department (usually by fax) and the wage garnishment will immediately stop. If you’re eligible to reclaim any garnished wages in the 90 days preceding your filing, then your attorney will prepare and submit the request on your behalf.

  1. Take the requisite credit counseling course.

As a result of the bankruptcy filing, you’ll need to complete a requisite credit counseling course that is approved by the Department of Justice (you’ll find a nationwide list here). The course can be taken online. Get started on this as soon as possible.

A Final Word

Having your wages garnished doesn’t mean that you’re powerless, and must resign yourself to whatever your creditors decide is in their best interest. You have legal rights and protections, and you should assume that your creditors don’t want you to know what these are. All they want and care about is their money, whereas what you want and care about is your overall financial health and future.

As such, if your wages are being garnished — or if a creditor(s) is threatening to do so — then don’t panic. Get your paperwork together, gather the appropriate information, speak with an experienced bankruptcy attorney, and make an informed decision that is best for YOU.

Learn More

To learn more about your options and what the road ahead might look like, contact the Law Office Charles H. Huber for your free, no-obligation consultation.

3 Different Ways to Fight a Traffic Ticket in Court

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taking a ticket to courtEveryone speeds — at least once in a while — and sometimes, you get caught. In fact, every single day, 112,328 people are slapped with an average speeding fine of about $150, and about 41 million speeding tickets are issued each year.

Getting a ticket can be very undesirable — costs are high, insurance premiums may go up, and taking a ticket to court can mean missing out on work and pay. Fighting your ticket, and getting the help of a traffic ticket lawyer, could save you from some of these negative effects. Check out these tips for traffic court:

Challenge the Officer’s Observations
Your citation is often solely based on what the officer who ticketed you thought happened. If you are able to cast a doubt on his ability to accurately perceive what happened, or that he misunderstood a crucial part of your narrative, you may be able to prove your innocence. Consider sourcing the statement of witnesses who will testify to your version of events, photographs of intersections, stop signs, and road signs. Provide any other evidence that you feel proves that your version of the events is true.

Prove That Your Action was Necessary to Avoid Harm
Sometimes, extenuating circumstances make it so that it is very hard to precisely obey the law, which is why you sometimes need to break it. This is a fact recognized in all states. For instance, you would be able to beat a speeding charge if you could prove that you were speeding to avoid an out of control truck. Some more realistic examples include speeding to make room for cars entering a highway or speeding to avoid an unseen obstacle.

Your Conduct Was Legally Justified
There are circumstances that could prove that your conduct was legally justified. For instance, stopping on a highway because of a loud noise coming from your vehicle, or speeding to the doctors because of heart pain.

The National Highway Traffic Security Administration estimates the collective cost of speeding and related accidents to be around $40.4 billion annually, but that doesn’t mean you won’t be able to figure out the best way to get out of your traffic ticket by taking a ticket to court. Get a speeding ticket lawyer or traffic lawyer to help you make your case.

Chapter 7 Bankruptcy: What Can You Expect From Your Bankruptcy Trustee

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filing for bankruptcyDid you know that Chapter 7 bankruptcy is what one might file for personal debt? There are many advantages of filing for bankruptcy, as many loans can be forgiven or restructured. However, it typically only takes around six months to complete, and a Chapter 7 bankruptcy costs $306, and stays on your credit report for 10 years after it is arranged.

But, sometimes the pros outweigh the cons, and in these cases, it is important to know what the Chapter 7 process looks like, and when and how to get help. For instance, it is good to know exactly what your bankruptcy trustee’s role will be.

When filing Chapter 7, an impartial bankruptcy trustee is appointed to oversee and administer your case. Their duties are wide-ranging, and include:

Reviewing Documents
When you file for bankruptcy, you file a petition along with other documents that disclose your personal and financial information, including information about your debts, your property, your income, and your financial affairs. Your trustee will often want to look at your pay stubs, tax returns, and other information about your assets. Their job is to make sure that your petition matches your financial documents.

Liquidating Nonexempt Assets
Luckily, some of your things can be exempt from the bankruptcy process, but everything else is sold off by your bankruptcy trustee, who is in charge of determining the value of your property and deciding whether or not they should be sold in order to pay your creditors.

Avoid Transfers or Security Interests
Before many people file for bankruptcy, they have properties transferred over to other people to avoid liquidation, or they pay back favored creditors, like family members. If your bankruptcy trustee detects any such actions, they can take the necessary actions to get the asset or funds back to distribute to creditors.

It is your bankruptcy trustee’s responsibility to make sure that your finances are restructured and all creditors are given at least something, but it is still important to enlist in bankruptcy help from a bankruptcy lawyer. If you are filing for bankruptcy under Chapter 7, then specifically a Chapter 7 bankruptcy attorney.