Our areas of practice include: Immigration and Naturalization Law, Criminal Defense and DUI (Driving under the Influence of Alcohol) litigation, Bankruptcy , Corporate and Business Law, Real Estate Transactions, Divorce, Child Custody and Support, Personal Injury and Workers' Compensation cases.
From our offices in Chicago and the Near Northwest Suburbs, Perry & Baker offer responsive service across a broad spectrum of civil and criminal matters.
Our attorneys have represented thousands of satisfied clients, whether they were accused of a crime in Federal or State Courts, facing deportation charges, sued or filing a suit in Federal or State court, in need of the protection of the Bankruptcy Code, filing or defending a divorce action, DUI charge, license suspension or revocation, child support or paternity case, seeking business or a family sponsored immigration visa, starting up and maintaining a corporation, buying selling or leasing residential or commercial property.
Our areas of practice include: Immigration and Naturalization Law, Criminal Defense and DUI (Driving under the Influence of Alcohol) litigation, Bankruptcy , Corporate and Business Law, Real Estate Transactions, Divorce, Child Custody and Support, Personal Injury and Workers' Compensation cases.
Chapter 7 means test.
The Bankruptcy Abuse Prevention and Consumer Protection Act — P. L. 109-8 (S. 256) — was signed into law on April 20, 2005. A key provision of the new law subjects certain petitions for debt relief under Chapter 7 to a means test. Bankruptcy petitioners with relatively high incomes could be prevented from filing under Chapter 7 (where many unsecured debts are discharged, or wiped out, by the court) and instead given the choice of converting to Chapter 13 (where some debt must be repaid out of future income) or having their petitions dismissed and receiving no bankruptcy relief at all. The means test takes into account the petitioner’s income, debt burden, and various allowable living expenses, which can vary significantly according to the debtor’s place of residence and particular circumstances. If income minus allowable living expenses exceeds certain levels, a Chapter 7 petition is presumed to be abusive.
Virtually all consumer bankruptcies are either Chapter 7 or Chapter 13 cases. Chapter 7 is the most common form of bankruptcy , accounting for 71.5% of non-business filings in 2004, or over 1.1 million cases. In Chapter 7, the debtor’s assets are liquidated and distributed among creditors, and many remaining debts are discharged, or cancelled, leaving the debtor free to make a fresh start. (Some debts are not dischargeable, and secured debts like mortgages are not affected by bankruptcy.) In practice, most Chapter 7 filings are “zero asset” cases, where unsecured creditors get nothing. (Several types of assets are exempt from liquidation and cannot be distributed to creditors.)
In Chapter 13 bankruptcies, debtors with regular incomes agree to a plan to pay back some or all of their debt under court supervision over a period of several years. At the plan’s conclusion, remaining debts are discharged. An advantage of Chapter 13 for debtors is that a wider range of debts can be discharged than under Chapter 7. If the debtor is unable to complete the series of payments required by the Chapter 13 plan, the case may be dismissed or converted to Chapter 7. Upon dismissal, remaining debts are not discharged, unless the court finds that the debtor cannot justly be held accountable for failure to complete the plan, and creditors have received at least the amount of repayment they would have received under a Chapter 7 filing. Under the old law, the choice of chapters was left entirely up to the debtor. Supporters of reform long argued that the “excessive generosity” of the old bankruptcy system encouraged abuse and allowed some debtors to repudiate debts that they could have repaid, at least in part. P.L. 109-8 responds to these concerns by restricting access to Chapter 7 in cases where debtors’ income is determined to be sufficient to repay some debt, after allowing for reasonable living expenses. The means test set out in Title I of the reform act will determine eligibility for Chapter 7 relief. Debtors who “pass” the means test will either have their Chapter 7 petitions dismissed or converted to Chapter 13 or Chapter 11.2 (Conversion will not occur without the debtor’s consent, but no other form of bankruptcy relief will be available.)