Personal Bankruptcy
Under the Bankruptcy Code after the reform act, what must Janet do before filing a petition for relief under Chapter 7?
Most wives are left with a burden after their husband dies, especially if the husband was the breadwinner and also if he left a huge hospital bill. There are two methods for the application of bankruptcy in the U.S.: Chapter 7 and Chapter 13 bankruptcy[1]. Janet has to fill out an application form with all financial information, including a medical bill of $50,000 and monthly payment proof, mortgage payment of $1500, earnings of $1500, social security of $1500 and life insurance of $1100. She will also have to appear in front of a trustee and take an online credit counseling course before getting a petition under Chapter 7[2]. Do you need any help for completing your assignment ? Contact us at eminencepapers.com. We endeavor to provide you with excellent service.
How much time does Janet have after filing the bankruptcy petition to submit the required schedules? What happens if Janet does not meet the deadline?
Janet will need less than six months to file a petition under Chapter 7, also known as liquidation bankruptcy, where a person sells one or all property to clear debts. She will have to consider seeking legal advice for methods she can use to get a petition when she does not meet the six-month threshold in Chapter 7[3]. However, she will continue to settle all the debt, or her properties will be auctioned.
Assume that Janet files a petition under Chapter 7. Further, assume that the median family income in the state in which Janet lives is $49,300. What steps would a court take to determine whether Janet’s petition is presumed to be substantial abuse under the means test?
Janet’s income is $ 4,100 per month. To be eligible under the Chapter 7 case, one of the requirements is that you should have an income below the median income of the state[4]. Janet’ State median family income is $49,300; therefore, her petition will be presumed to be a substantial abuse. She has reached the minimum requirement for filing a case under Chapter 7, and the case will be presented in court in less than six months. Although she will be granted authority to file the petition, it does mean that the court will rule in her favour.
Suppose the court determines that no presumption of substantial abuse applies in Janet’s case. Nevertheless, the court finds that Janet does have the ability to pay at least a portion of the medical bills out of her disposable income. What would the court likely order in that situation?
Janet’s case is determined to have no presumption of substantial abuse of the court decision. Chapter 13 is referred to as reorganization bankruptcy, where the petitioner can keep their property after completing a court repayment plan between three to five years. The court found out that Janet was not in a position to pay her debt. Therefore, the court would order her to file her case for bankruptcy under Chapter 13[5]. That would be the best decision since she will not sell her family’s properties, which will help other family members, like children, in the future.
Rather than being allowed to file Chapter 7 bankruptcy petitions, individuals and couples should always be forced to make an effort to pay off their debts through Chapter 13
Based on Janet’s options for filing a bankruptcy through Chapter 7 and the importance of forcing people to file Chapter 13 bankruptcy petitions, many people like to file bankruptcy under Chapter 7 so that they will sell their late couple’s property to make some extra cash after paying debts. When Janet wins the case, she will still receive a social security benefit of $1500, life insurance of $1100, and an extra amount from property sold: she can also involve other stakeholders: her, her late husband’s parents, and relatives to help her raise monthly contributions for paying off the debt. Many couples opt for Chapter 7 instead of Chapter 13 because they do not want to have the duty of paying uninsured hospital bills for their deceased loved ones. They want quick money after selling family property, and they get committed to other relationships without considering children and other relatives. Therefore, the court will make the best judgment if this kind of petition will be forced to make an effort to pay off debt through Chapter 13.
Bibliography
Miller, Roger LeRoy. 2017. Business Law Today. 11. Boston: Cengage Learning.
[1] Rodger LeRoy Miller. ”business law today 1s1 edition p 562-564
[2] Ibid p562
[3] Ibid p662
[4] Ibid p563
[5] Ibid p564
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Question 
Personal Bankruptcy
Answer the 4 questions passed on the information given. Then discuss your a position on the Debate This topic.
Debate This: Personal Bankruptcy
Personal Bankruptcy
From Business Law II
Chapter 26 p. 631
Three months ago, Janet Hart’s husband of twenty years died of cancer. Although he had medical insurance, he left Janet with outstanding medical bills of more than $50,000. Janet has worked at the local library for the past ten years, earning $1,500 per month. Since her husband’s death, Janet also has received $1,500 in Social Security benefits and $1,100 in life insurance proceeds every month, giving her a monthly income of $4,100. After she pays the mortgage payment of $1,500 and the amounts due on other debts each month, Janet barely has enough left over to buy groceries for her family (she has two teenage daughters at home). She decides to file for Chapter 7 bankruptcy, hoping for a fresh start. Using the infoarmation provided in the chapter, answer the following questions.
- Under the Bankruptcy Code after the reform act, what must Janet do before filing a petition for relief under Chapter 7?
- How much time does Janet have after filing the bankruptcy petition to submit the required sched-ules? What happens if Janet does not meet the deadline?
- Assume that Janet files a petition under Chapter 7. Further assume that the median family income in the state in which Janet lives is $49,300. What steps would a court take to determine whether Janet’s petition is presumed to be substantial abuse under the means test?
- Suppose the court determines that no presumption of substantial abuse applies in Janet’s case. Nevertheless, the court finds that Janet does have the ability to pay at least a portion of the medical bills out of her disposable income. What would the court likely order in that situation?
Debate This:
- Rather than being allowed to file Chapter 7 bankruptcy petitions, individuals and couples should always be forced to make an effort to pay off their debts through Chapter 13