St. Louis Bankruptcy Lawyers Blog

If you’re unable to pass the Means Test, then it’s certainly time to hire a bankruptcy attorney (if you haven’t already). When you file a St. Louis Chapter 7 bankruptcy, a large amount of information is provided to the court. All your real estate, personal property, stocks, bonds, and other property has to be disclosed. All sources of income need to be revealed. And all of your debts have to be shown. In addition, it is important to determine what your household size is, because this will initially determine whether or not you pass the vaunted Means Test.

The Means Test is a mathematical formula that was devised by the US Congress (actually, a bunch of lawyers from major credit card companies who lobbied Congress very aggressively) to eliminate all the ‘abuse’ that had evidently been occurring (according to majority in Congress at the time, there had been widespread abuse of the system by people all over the place filing for bankruptcy on a whim). The test is supposed to determine whether or not your income is sufficient to support you without having to file for bankruptcy. This test is broken up into two parts: First, if you are below a certain median income level, then you will most likely qualify for a Missouri Chapter 7 (assuming you haven’t filed a Chapter 7 within the last eight years), and not have to deal with the Means Test at all. So for instance, according to the government, the average or median income for a household of two is: $50,603 (as of November 2, 2011). If you are a household of two, and your total household income is less than this amount, you can do a Chapter 7.

If you are above the median income level, that doesn’t necessarily mean that you can’t do a St. Louis Chapter 7. At this point, all the deductions and exemptions that the government allows you to take come into play. Things like the amount you spend monthly on healthcare-related expenses, the amount of tax deducted from your paychecks monthly, any court-ordered child support or maintenance, or childcare-related expenses, and the amount you contribute monthly to charitable organizations. There are several other deductions that can be taken as well, such as expenses for a car, a house, and what you spend on regular living expenses. But if after all of these deductions and exemptions are taken you still do not pass the Means Test, it is most likely that you will have to file a St. Louis Chapter 13 bankruptcy. This type of bankruptcy is described as a repayment plan over the course of three to five years, in which certain debts are paid back over time.

Yes, but there are a great many rules that the collector must follow when they do something like this. And more often than not, the collector breaks those rules, disobeys the law, and violates the rights of not only the person who owes the debt, but also the individual to whom the call was made (i.e. the friend or family member).

The area of law that governs this type of activity is called the Fair Debt Collection Practices Act. This is a federal law that regulates what a collection agency can and can’t do in their attempts to collect on a debt. For instance, the FDCPA states very clearly that if a debt collector communicates with someone other than you about your debts (like a friend or family member), the only acceptable reason for doing so would be to confirm the correct location information (i.e. address or phone number) of the person who owns the debt (you). The collector cannot, however, tell the friend or family member that they are calling about a debt, or that you owe a debt, or to whom you owe a debt, or that they have been trying to find you without any success so that they can collect on the debt, or even that they are a debt collector. They also can’t call the friend or family member more than once (unless that person requests another call).

In other words, if a third party individual (whether that person is a friend, family member, high school classmate, neighbor, off-handed acquaintance, or a reference) is contacted by a debt collector, that individual should really have no idea that they were just talking to a collection agency. That’s how strict the law is. And as a result, there are frequent violations. Such violations typically carry a fine (or damages) of $1,000, which would have to be paid to you.

They’re not supposed to. But of course they frequently do. Federal law prohibits this type of collection activity. This is usually a big surprise to people when they hear it, but it is an absolute violation of your consumer rights for a collection agency to call your cell phone when they attempt to collect on a debt.

The specific laws that regulate collection agencies are the Telephone Consumer Protection Act (TCPA) and the Fair Debt Collection Practices Act (FDCPA). These consumer-based laws dictate what the collection agencies can and can’t do. If there is a violation of these laws, the court will hold that your rights have been violated, and the collection agency will be required to pay damages (i.e. an amount of money to be paid in compensation for having violated your rights). So for instance, 15 U.S.C. §1692f(5) makes it a violation for collectors to call your cell phone. And most of the time, they are calling not once, but several times a day. Showing proof of the violation is as simple as providing cell phone billing records (because every time you answer your cell phone, it will register on your monthly statement). The reason why federal law prohibits this kind of collection activity is because every time you answer your cell phone, you are incurring a cost (i.e. you are being charged for the minutes used in your plan). It is therefore unlawful for a collection agency to cause you to incur a cost in their attempts to collect.

There are other kinds of violations as well. For instance, the collection agencies are not supposed to call excessively throughout the day and night. So if they are calling more than two or three times in a day, it is possible that another violation has occurred. If the collector is verbally abusive or threatens you in any way, this is also a clear violation of the Act. And if they are calling friends, family, or your place of work, it is almost certain that their actions have in some way harmed your federal rights.

No, you can file individually. You certainly have the opportunity to file jointly if you are married. But it is not necessary (although, there may very well be circumstances in which a joint filing makes more sense, depending on the debts involved).

Filing individually is fine, but you will still need to supply some information to the court regarding your spouse. For instance, the court requires that all sources of household income must be disclosed for the six month prior to filing. This is normally taken care of by providing your attorney with any and all paystubs that may have been received. But because the court is interested in all of the household income, your attorney will be asking for your spouse’s paystubs over the last six months as well (again, even if that person is not filing with you). Why? Let me give you an example of why it is so important:

According to the government, the average (or median) income for a household of two is $51,120. Let’s assume that you have are in fact a household of two (you and your spouse), and your household income is below this level (in other words, the combined income from all sources between you and your spouse is less than $51,120), then you qualify for a St. Louis Chapter 7 bankruptcy (assuming you have not filed a Missouri Chapter within the last eight years). This type of filing is commonly described as a ‘straight discharge,’ wherein unsecured creditors (like credit cards, medical bills, payday loans, etc.) are knocked out forever (putting you on the road to financial rebuilding in a relatively short period of time). But the only way to prove to the government that you do indeed qualify for such a filing is by providing income verification.