Determining The Median Income For Your Household Size
The income limit for your state and household size is based on data from the Census Bureau, and it changes multiple times per year.
To find the most up-to-date information, go to the means testing page from the United States Trustee and choose the current option in the drop-down menu titled âData Required for Completing the 122A Forms and the 122C Forms.â This will bring you to a new page on the Justice Departmentâs website that provides a link titled âMedian Family Income Based on State/Territory and Family Sizeâ provided by the Census Bureau. From there, you can pull up a table showing median incomes by household size, for each state.
If You Do Not Live In England Or Wales
You can declare yourself bankrupt in England or Wales if you live outside the UK, provided you lived in England or Wales or have had a business there at some point in the last three years. The Bankruptcy Order made in England and Wales may not be recognised in other countries outside the UK.
You Will Be Discharged From Bankruptcy
A discharge releases you from the legal obligation to repay the debts you had as of the date you filed for bankruptcy, except for specific types of debts that are excluded by law. These include alimony and child support payments, student loans , court-ordered fines or penalties, and debts arising from fraud.
The timing of your discharge depends on a number of factors, including whether this is your first bankruptcy, and whether you are required to make surplus income payments.
Timing of your discharge from bankruptcy
If this is your first bankruptcy and you are not required to make surplus income payments , you will be eligible for an automatic discharge from bankruptcy in nine months. If your surplus income is higher, your bankruptcy will be extended to 21 months and you will be required to make payments from your surplus income.
Your discharge from bankruptcy will happen automatically if
- the discharge is not opposed by the LIT, a creditor or the Office of the Superintendent of Bankruptcy
- you have attended the mandatory financial counselling sessions and
- this is your first or second bankruptcy.
To ensure that a greater percentage of debts is repaid to creditors, the following standards set out when an automatic discharge will occur.Timing of your discharge from bankruptcy , First Bankruptcy
|Surplus income is greater than $200 per month||36 months after filing|
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Filing For Bankruptcy Can Cost Anywhere From A Few Hundred To A Few Thousand Dollars Depending On The Type Of Bankruptcy Filed And Whether You Hire An Attorney Or Take A Diy Approach
Filing fees and other miscellaneous costs required to file a bankruptcy petition typically range from $300 to $400. If youre filing on your own, you may not have to pay much more than that.
Working with a bankruptcy lawyer can add to those figures significantly. Their fees can vary widely based on the type of bankruptcy you file for, the market rate where your attorney practices and the complexity of your financial situation.
Coming up with any extra money might seem impossible if youre already struggling to pay for basic expenses and creditors are breathing down your neck. Luckily, assistance may be available if you believe bankruptcy is the right choice for you.
Lets look at the two common types of bankruptcy, the fees you may be responsible for and a few ways you might be able to pay for them.
How Much Does Bankruptcy Cost
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In a Nutshell
Bankruptcy costs include court filing fees, credit counseling course fees, and if you hire a bankruptcy lawyer, attorney fees. The total cost will largely depend on your financial situation, the complexity of your case, and whether you file Chapter 7 or Chapter 13 bankruptcy.
Chapter 7 bankruptcy provides relief for individuals and businesses that have no hope of ever repaying their debts. Thatâs why it seems strange to some that there are actual costs involved to get this relief. Keep in mind, though, that everyoneâs case is different and someoneâs inability to pay their debts as they come due does not necessarily mean that they canât pay the costs of filing a Chapter 7. Letâs take a look at what they are.
Bankruptcy costs include court filing fees, credit counseling course fees, and if you hire a bankruptcy lawyer, attorney fees. The total cost will largely depend on your financial situation, the complexity of your case, and the type of bankruptcy you file .
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Should You File Chapter 7 Bankruptcy If You Don’t Have Much Debt
Ultimately, it’s up to you. If you’re on the fenceor even if you’re notconsider the following questions:
- Can you negotiate with creditors to pay less? If you can settle with all of your creditors, it could be a good option. However, keep in mind that you’ll be assessed tax on any forgiven amount over $600. By contrast, debt discharged in bankruptcy isn’t taxed.
- Can you pay back the amount you owe? Many people can pay back $10,000 or less. Even so, exceptions exist. Bankruptcy might offer a quicker way to rehabilitate your credit and fix your finances if you don’t think you’ll ever be able to repay your debt. Plus, the automatic stay stops collectors.
- Do you want to work with a credit counseling agency and pay less over time? This approach lets you pay far less in interest and pay off accounts in about five years. However, debt settlement agencies work primarily with major credit card companies, and after you finish paying, you’ll have to rebuild your credit. You’d likely get to the same place faster through bankruptcy, and it could cost significantly less.
Cost Of Bankruptcy Proceeding
There is a cost to declare bankruptcy and work through the process, however, unlike professionals such as accountants and lawyers, Licensed Insolvency Trustees do not set their own rates and fees there is no invoice for services rendered. Many people mistakenly believe that the cost of bankruptcy is related to the amount of debt you have this is false. Regardless of the total amount of debt that you are writing off in the bankruptcy, the tariff-based Trustees fees are the same.
Since most people keep all their assets in a bankruptcy, the bankruptcy costs are paid directly by the person who wants to declare bankruptcy:
- In most bankruptcies the direct cost to the person filing bankruptcy is $2,300. Usually the Licensed Insolvency Trustee will work out a payment plan where you will pay this over the course of the nine-month period of bankruptcy.
The costs covered in this personal bankruptcy fee include:
- The filing fee to register the bankruptcy in Canada
- Costs for two financial counselling sessions done as part of the bankruptcy
- Preparation of and filing related income tax returns
- Ongoing support throughout the bankruptcy process.
If youve filed bankruptcy before the fees payable will be higher, and the length of time before you will be eligible to be discharged from bankruptcy will also be longer. .
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When Bankruptcy Attorneys Charge Higher Fees
Most lawyers charge a “flat” or fixed fee that will cover the preparation of your Chapter 7 bankruptcy petition and attendance at your court appearance. When quoting the flat fee amount, many attorneys consider the difficulty of your case to estimate how much work they’ll have to do on your behalf. Here are some issues that might increase the amount of time needed for your caseand therefore, the amount of the flat fee the lawyer will charge.
The Bankruptcy Income Test
In Canada, the cost of a personal bankruptcy is based on an income test. In this test, the more that you earn, the more that a bankruptcy will cost you. The actual term is called Surplus Income.
If your income exceeds a set government amount , you will have what is called surplus income. As a result, you will be required to make surplus income payments over an extended period of time . The surplus income payment is 50% of the surplus income. For example, lets say you have surplus income of $400 over the government limit, you will be required to pay 50% of that surplus to the trustee for that particular month. In this case, $200. If your surplus income remains the same for the term of your bankruptcy, you will be required to pay that for 21 months.
Surplus income also affects how long your bankruptcy will last. Here is a breakdown:
- First bankruptcy and no surplus income = 9 months
- First bankruptcy with surplus income = 21 months
- Second bankruptcy and no surplus income = 24 months
- Second bankruptcy with surplus income = 36 months
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Are Debt Collectors In Canada Allowed To Keep Calling Me If I Declare Bankruptcy
Once a bankruptcy claim is filed, all creditors and collection agencies are required by law to stop contacting you. Additionally, a creditor cannot garnish your wages.
You can continue to receive calls from secured creditors. This applies to a mortgage, lien on a car, or debt for alimony or maintenance.
What Can You Do If You Can’t Find A Licensed Insolvency Trustee
If you are unable to get an LIT to accept your file, or if you cannot afford to hire an LIT, the OSB’s Bankruptcy Assistance Program may be able to help, provided that you:
- have contacted at least two LITs and tried to obtain their services
- are not, and have not recently been, involved in commercial activities
- are not required to make surplus income payments and
- are not in jail
A creditor is harassing me daily. What should I do?
Although the regulations differ slightly across Canada, there are limits on what creditors and collection agencies are allowed to do. For example, they cannot make telephone calls of such a nature or frequency that they amount to harassment of you or your family. In addition, there are certain times when they are not allowed to call.
Tips for dealing with collection agencies If you feel you are being harassed, contact either an LIT or a qualified and experienced credit counsellor. They can help you by serving as an intermediary between you and your creditor.
and we will send you some information and a list of LITs who participate in the program.
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The Lit Files Paperwork
After considering your options with the LIT, if you decide to pursue bankruptcy, the LIT will complete the necessary documents and file them with the Federal Governments Office of the Superintendent of Bankruptcy . The LIT will also notify your creditors that you are filing for bankruptcy, and their phone calls to you will stop. Once you have filed for bankruptcy, you are considered to be an undischarged bankrupt and you are officially in bankruptcy. All legal claims against you by your creditors will stop, and all calls and questions will be handled by your trustee.
How Much Does It Cost To Declare Bankruptcy
You may be surprised to learn that it costs money to claim bankruptcy in Canada. The cost of bankruptcy differs for each individual as it is based on monthly income, expenses, family size, and assets. Without knowing the specifics of an individual situation, we cant give the exact costs. However, we can walk you through all the considerations that an Ontario bankruptcy trustee will talk about when determining what a bankruptcy will cost.
There are three components to the cost to file bankruptcy in Ontario or any province in Canada:
How you pay your fees and monthly payments may differ by trustee. Hoyes Michalos is one of the only Ontario bankruptcy trustees who offer the convenience of flexible pre-authorized payments to help make managing your bankruptcy payments easier. You can set your payments monthly, weekly, bi-weekly whatever works for you. We do not collect substantial up-front fees which may be the case with some trustees and is often the case with other debt consultants.
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How Does The Cost Of Filing Bankruptcy Compare To Other Forms Of Debt Relief
If you are worried about the costs of filing bankruptcy, work with your Licensed Insolvency Trustee to consider bankruptcy alternatives. Compared to other forms of debt relief, bankruptcy requires debtors to reassign their assets in order to clear their debt. For debtors with high value assets, another form of debt relief like a consumer proposal may be more appropriate. Here is how much filing bankruptcy costs in Canada versus bankruptcy alternatives.
|Form of Debt Relief|
What Does It Cost To File For Bankruptcy
The cost of bankruptcy varies significantly depending on the type, size and complexity of the case. Chapter 7 liquidation bankruptcies, which can erase many types of debt, may cost as little as the filing fee, if you dont use an attorney.
Chapter 13 bankruptcies, in which you cut a deal with creditors to pay them back over time, often require an attorney and may cost significantly more. Chapter 11 bankruptcies, commonly used by businesses, are the most expensive, with high court fees and typically much steeper legal costs.
Some bankruptcy fees are nearly inescapable. The federal courts that handle all bankruptcies charge standard fees, including administrative fees just for accepting the cases. Filers may pay other court fees as a case winds its way through the legal process, though courts can modify or waive some fees in cases of financial necessity.
Filers may also pay fees for professional helpfrom attorneys, accountants or appraisersbut these costs can be avoided in some cases. For instance, state legal aid societies and pro bono attorneys may provide assistance to low-income individuals.
Obviously, the cost of repaying creditors in Chapter 13 and Chapter 11 cases can be high, too. But while Chapter 7 bankruptcy calls for the filer to sell off assets to pay debts, nearly all Chapter 7 cases involve no assetsso there is no liquidation, and the filer pays nothing to creditors to discharge the debts.
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How Your Creditors Are Paid
The official receiver will take control of your assets unless an insolvency practitioner is appointed. An insolvency practitioner is usually an accountant or solicitor.
The person who takes control of your assets is known as the trustee. The law says you must cooperate fully with them.
The trustee will sell your assets and tell the creditors how the money will be shared. Creditors must then make a formal claim. You cannot make payments directly.
If you have assets, money from the sale of these will be used to pay the costs of the bankruptcy process before creditors are paid. If your case is administered by the official receiver the following fees will all be deducted from the money realised:
- an administration fee of £1,990 if you applied for your own bankruptcy or £2,775 if someone else applied
- a general fee of £6,000
- 15% of the total value of assets realised
- a fee charged at an hourly rate where money is paid to creditors
If there are insufficient assets in your case the official receiver will still process your bankruptcy.
Next, money will be used for:
- certain debts in relation to employees, if you had any
- your other creditors
- interest on all debts
Any money left over will be returned to you. If everyone is paid in full you can apply to have your bankruptcy cancelled .
Ftx Has 10 Times More Creditors Than Originally Estimated According To A New Bankruptcy Filing
When crypto exchange FTX filed for bankruptcy last week it said it owed money to about 100,000 creditors. A Tuesday filing puts that number at more than 1 million.
Lawyers for the company said in the filing that the case is complex and involves more than 100 debtor entities on the FTX side and a million-plus creditorsmostly FTX customers.
While bankruptcy code usually would require FTX and its associated companies to file a list of the top 20 creditors for each debtor entity, such as FTX, FTX US, and Alameda Research, its lawyers have requested permission to file a consolidated list of the top 50 people and organizations owed because the companies have so much overlap. If the request is approved, the company plans to file a top 50 list by Friday.
Compiling separate creditor lists for each individual Debtor would consume an excessive amount of the Debtors limited time and resources at this critical time, the filing read.
In a separate motion filed on Monday, lawyers for the company asked to consolidate dozens of bankruptcy cases for FTX-associated companies.
In the wake of FTXs bankruptcy announcement, lawyers for the company also said theyve been in contact with dozens of regulators, including the Securities and Exchange Commission, the Commodity Futures Trading Commission, and other federal, state, and international agencies.
There is substantial interest in these events among regulatory authorities around the world, the filing read.
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