- Local Chapter 7 and Chapter 13 bankruptcy laws are complicated. Only a seasoned RI bankruptcy lawyer can keep you out of trouble and save you money.
- In Rhode Island, you must choose between state and federal exemption laws. Only a skilled bankruptcy lawyer knows how to protect the most property.
- Which type of bankruptcy is best for you? Chapter 7 or Chapter 13. A qualified Rhode Island bankruptcy lawyer can help explain all of your bankruptcy options.
- A Rhode Island Bankruptcy Lawyer knows how your recent activity affects your bankruptcy options. Will recent purchases or cash advances hurt your case?
- Are reaffirmation agreements necessary to protect your property in a RI Bankruptcy? An experienced RI bankruptcy lawyer knows the answer.
Health Care Costs and Filing For Bankruptcy
America may be a world leader in many areas, but healthcare affordability is not one of them. According to a recent survey conducted by Health Affairs, American adults, more than the citizens of any other industrialized nation, avoid critical healthcare because of the high cost of coverage.
This comes as no surprise to bankruptcy lawyers, and certainly not to those who have filed for Chapter 7 bankruptcy relief due to unavoidable medical bills.
Health Affairs’ survey revealed several interesting facts—
- one-third of American adults neglected recommended medical care when obviously ill (whereas in Germany, only one quarter of adults went without care.)
- one-fifth of Americans reported having trouble paying off medical bills (barely 10% of Europeans and Canadians cited similar troubles.
- almost one-third of Americans surveyed agreed on the confusing nature of insurance policies and documentation.
- America reported the widest margins relative to available healthcare between income levels, with the poorest citizens receiving the least care.
Most of my clients have at least some medical debt at the time I file their bankruptcy petition. For some, it is the primary reason they need to file for bankruptcy relief. Many had either no health insurance, or poor coverage, at the time of a major illness or accident. I’ve seen medical bills range from a few thousand dollars, to hospitalizations costing over $ 100,000.
If you face a mountain of unpayable medical debt, give me a call. I can advise whether it makes sense to file for bankruptcy in your particular situation.
RI Bankruptcy Law: Median Income Figures Change Again
RI bankruptcy lawyers have new income guidelines to determine who qualifies for Chapter 7 bankruptcy relief. On November 1, 2012, the US Census figures became effective for all new consumer bankruptcy filings. Other than for 3-person households, it became slightly more difficult to qualify for Chapter 7 bankruptcy relief for every other household size in Rhode Island.
Below are the median income figures that I use for my Rhode Island clients who need to file for bankruptcy protection:
- 1 person household $ 45,945 (down from $ 47,798)
- 2 person household $ 60,538 (down from $ 61,506)
- 3 person household $ 75,306 (up from $ 68,909)
- 4 person household $ 82,086 (down from $ 88,990)
- Add $ 7,500 for each additional household member above a 4 person household
As a reminder, these are gross income figures. To determine whether you qualify for Chapter 7 bankruptcy relief, we take your trailing 6 months of gross income from all sources (except Social Security and unemployment benefits), multiply it by two and then compare it to the chart above.
While its easier to qualify for a Chapter 7 bankruptcy with gross income lower than the median, in many cases, you may still qualify with income slightly higher than the median.
Bottom line: Its impossible to forecast whether it will become easier or more difficult to file your Chapter 7 case in the future. Even if you are not ready to file your case now, I can run an analysis on your family’s income to see if your income is presently low enough to qualify for debt relief.
Rhode Island Bankruptcy Debtors Catch a Break
Twice a year, the US Census Bureau and the IRS provide data used by bankruptcy lawyers to determine who qualifies for debt relief. On May, 1, 2012, the new income numbers became effective for all new bankruptcy case filings. The good news is that median income figures rose for all household sizes in Rhode Island.
Below are the new median income figures that I will use for my Rhode Island clients who need to file for bankruptcy:
- 1 person household $ 47,798 (up from $ 46,335)
- 2 person household $ 61,506 (up from $ 59,624)
- 3 person household $ 68,909 (up from $ 66,800)
- 4 person household $ 88,990 (up from $ 86,267)
- Add $ 7,500 for each additional household member above a 4 person household
As a reminder, these are gross income figures. To determine whether you qualify for Chapter 7 bankruptcy relief, I will examine your trailing 6 months of gross income from all sources, except Social Security and unemployment. I will then double the gross figure and compare it to the chart above.
Bottom line: Many more who need to file for bankruptcy protection in Rhode Island now qualify. This window of opportunity may only be available for a short period, so if you are considering bankruptcy, call a qualified RI bankruptcy attorney today.
Top 7 Reasons To File Chapter 7 vs Chapter 13
The US Bankruptcy Code provides a number of choices to people struggling with debt. The most popular choice is to file a Chapter 7 Bankruptcy petition. Here are seven reasons why.
- Time—A normal Chapter 7 bankruptcy case takes about 100 days from beginning to end. After a brief creditor’s meeting one month into the process, the case ends two months later.
- Property—Because federal and/or State exemption laws allow a debtor to protect their assets, most Chapter 7 filers do not lose any property. The bankruptcy trustee handles most cases as “no asset” cases, meaning that the debtor is not required to forfeit any property.
- Cost—Filing under Chapter 7 is considerable cheaper than filing under Chapter 13. Even though lawyer fees may differ from state to state, most bankruptcy attorneys will quote a fee that is fair and affordable. Bankruptcy lawyers who practice exclusively in bankruptcy (not general practitioners) understand you don’t have extra money to overpay for their services.
- Repayment—You are not required to repay unsecured non-priority creditors like credit cards, utility bills, personal loans, or medical bills. If you created your debt in good faith and no creditor objects to your bankruptcy, most unsecured credit obligations will be destroyed in your bankruptcy.
- Privacy—Record of your bankruptcy is only accessible in the court system. In most cases, the only people who will know you filed for bankruptcy protection are you, the court, and your creditors.
- Credit—Most people who file under Chapter 7 can reestablish credit shortly after their bankruptcy concludes. (Your debt to income ratio improves once your debt has been eliminated: the first step towards rebuilding your credit.)
- Stress—Most chapter 7 filers never set foot in a courtroom. Instead, they merely attend a brief, informal hearing with the trustee assigned to their case.
