When Bankruptcy is not a good
idea
Sometimes bankruptcy is not a good idea. Bankruptcy might not be for you
if you fit one or more of the following situations. The law is complicated, so
be sure to call the Law Offices of Carolyn Patrick and talk to Carolyn about
your situation.
Non-exempt Property: In rare
cases, a client may own more property than can be exempted.
In such a case the client may have to surrender (or give
up) this non-exempt property to the trustee. This may
be the case if you own a very expense car that is paid
for; you own real estate (i.e., land and/or buildings)
other than your home; you own an expensive home that
is paid for; or you have large sums of money in the bank.
Surplus Income: Occasionally
a client's monthly income exceeds her monthly living
expenses by too much. In that case the Court may not
allow you to file a Chapter
7 bankruptcy. You must either pay your debts in part
through a Chapter
13 bankruptcy or have your bankruptcy dismissed.
How much is too much extra income? Unfortunately the
law doesn't say. However, if you have excess monthly
income of $150 or more it may be too much. Also if your
excess monthly income when added up over three years
(36 months) is enough large enough to pay at least half
of what you owe, it may be too much.
Payments to Insiders: If you
made payments totaling $600 or more over the last year
on debts owed to a family member, relative or friend,
the Court may require that family member, relative or
friend to give the money back. The Court is concerned
that you might favor these people or your other creditors.