One of most misunderstood aspects of bankruptcy (but one of the most written about online) is the means test.  Many people who are considering bankruptcy fill out online “means test calculators”.  When they “fail” the test, most people think that bankruptcy is not an option for them.  (Some non-bankruptcy lawyers may tell you that as well.)

The Means Test is only one part of the bankruptcy process:

Just because your household income is higher than the average in your state, the Bankruptcy Code still takes into account your individual circumstances.  You may still be able to file a Chapter 7 Bankruptcy or get substantial relief under a Chapter 13 Bankruptcy.

The internet is a powerful tool for finding out information but if your are considering bankruptcy don’t take a chance on getting some bad advice.  Talk to an experienced consumer bankruptcy lawyer.

West Virginia is like most states in that it allows for judgment creditors to garnish your wages in order have a debt repaid.   In order for a creditor to garnish your wages they first have to take you to court and get a judgment against you.  A bankruptcy filing can stop collection lawsuits and wage garnishments, even if the garnishment has already started.   Our West Virginia bankruptcy lawyers stop lots of wage garnishments each year.  If you are being sued for debt collection or if a creditor is garnishing your wages its not too late to get help.

Myth:  You can’t get credit for 7 years after filing a bankruptcy.

This simply is not true.  This is a myth about bankruptcy that is popular because a bankruptcy filing will remain on your credit history for period of 7 to 10 years.  However, this does not mean that you cannot get credit during that time.  There are several factors that go into getting credit (e.g., income)  but I have clients  who are able to get financing for vehicles immediately after their bankruptcy is discharged in a Chapter 7 and sometimes during their Chapter 13 Bankruptcy.  According to most home loan guidelines, you may be eligible for a home loan within 3-5 years after filing.

Why would someone give me credit after filing a Bankruptcy?

It is a surprising fact, but to some lenders you become a better credit risk after filing bankruptcy.  For example, if before filing bankruptcy you had $30,000.00 in credit card debt, a lender may not want to give you credit to buy a car.  The lender would be worried that you could not afford to make the payments on all of your existing debt plus the new obligation of the car loan.  However, after bankruptcy you no longer have the burden of the credit card debt and the lender will be more confident that you can afford the car payments.  You most certainly will pay a higher interest rate for the credit but it will give you the ability create a positive credit history.

I always say that bankruptcy shouldn’t be looked at as the end of the road for your finances.  It can be clean slate upon which you can rebuild your financial future.
David J. Hinkle
West Virginia Bankruptcy Attorney

Although keeping your vehicle depends on certain factors, in almost all bankruptcy filings keeping your car is possible if not easy to do.

The two main factors in determining whether you can keep your car (or truck etc.) In West Virginia are:

1.  The status of your payments. (Are you current or behind?)

2.  The amount of equity you have in your vehicle.

Status of Payments

As a rule of thumb, if you are financing a vehicle and you are current on your payments you can keep your vehicle even if you file a bankruptcy.  Actually, the same is true whether you file bankruptcy or not.  If you fall behind on vehicle payments, the lender will want to repossess the vehicle.

Equity in Vehicle

The second main factor in determining whether you can keep a vehicle in bankruptcy is the amount of equity your have in your vehicle.  Equity is determined by comparing the value of the vehicle to the amount that you owe the lender.  If the vehicle is worth more than you owe, then you have positive equity.  That equity is an asset that must be accounted for in your bankruptcy case.  The bankruptcy laws in West Virginia are very generous with respect to how many assets you can keep when you file and, generally, the equity my clients have in their vehicles falls under the allowable levels.

David J. Hinkle
West Virginia Bankruptcy Lawyer