We meet a lot of people with a host of varying circumstances. We all know that the economy has been terrible for several years. We meet a lot of people that are unemployed or underemployed. We also meet a lot of people that have been laid off and can only find work at a fraction of what they were previously earning. Sometimes it is illness or increasing family size that causes a financial strain. Most of our clients never expected to be considering bankruptcy. We understand, and we are here to help.

When you come in we will go over some personal information with you. We will ask about your employment, your family size, your education, what types of property you own, and how much money you make. We know these are personal questions, but we need to ask them and we need you to answer as honestly as possible to help you through this as smoothly as possible. We ask about your income because we are assessing what type of bankruptcy will best fit your needs. To file a chapter 7, also commonly referred to as a "straight bankruptcy" you must meet certain income guidelines. Basically, there is an income cap that is dependent upon your family size. Now, don’t fret, your "family" doesn’t necessarily mean that an individual has to be your spouse or child. We have a number of clients that support nieces or nephews or even parents. If that is something that concerns you we would be happy to discuss that with you in detail.

Getting back to the income, there is what is called a Means Test. Basically, the bankruptcy petition looks at your current income for your present and future ability to pay, but also looks at your income for the last six months to determine eligibility for a Chapter 7. Now, like we discussed, there are some situations where in the last six months an individual may have had the ability to pay debts, however, that may not be the case moving forward. There are also situations where an individual may need or want to file a Chapter 13, however, the past six months make it look like he or she has more money to repay than he or she will moving forward.

Don’t worry just yet. We may still be able to help. In many cases we can file the petition as include some additional information to show the change of circumstances. This is commonly referred to as a Lanning argument. We know that clients have been advised by others, or found on the internet, that they should to wait to file when there is change of circumstances. We want you to know that this may not always be necessary. If you have questions about this, or any other questions, please call your St. Louis Bankruptcy Attorney today!