Can I file for chapter 7 bankruptcy as a school teacher? 14 Answers as of January 08, 2011

I am a school teacher. After 25 years, I have a salary of 72,000 and debt of 43,000. Can I file Chapter 7? I had to get a masters degree to keep my job and that helped put me in debt even further. I am also a tenant in common of an undervalued condo with an unmarried friend. Would my bankruptcy affect her half of the property or her credit rating?

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Mankus & Marchan, LTD
Mankus & Marchan, LTD | Tony Mankus
Your income may be above the "means test" needed to qualify for a Chapter 7 bankruptcy. You would likely need to file a Chapter 13 bankruptcy. It should have no impact on your unmarried friend's credit rating, or her 1/2 interest in the condo. There are many nuances, however, and you should consult with a bankruptcy attorney.
Answer Applies to: Illinois
Replied: 1/8/2011
DiTocco Law Group, PLLC
DiTocco Law Group, PLLC | Tony DiTocco
There are several parts to your question:

1. With a $72,000 salary and a 2-person household, you do not "automatically" qualify for Chapter 7. You would only qualify for Chapter 7 if you pass the "means test" (prove that your non-discretionary expenses equal or exceed the household income), or if you can show that the majority of your debts are "business debts."

2. In Bankruptcy, you will probably not be able to discharge student loan debt.

3. Filing Bankruptcy will not necessarily save the condo if you fall behind on the payments, but it will insulate you from a deficiency judgment if there is a foreclosure.

4. Your Bankruptcy will generally not affect your TIC unless there is a deficiency in foreclosure, in which case she may be on the hook for the entire deficiency (for which you would be discharged)
Answer Applies to: Florida
Replied: 12/29/2010
DiManna Law Office, LLC.
DiManna Law Office, LLC. | Dawn DiManna
You will need to consult with a bankruptcy attorney as there is more information needed to run the means test. Also, school loans are not typically forgiven in a bankruptcy. It will not affect your friend's credit rating.
Answer Applies to: New Hampshire
Replied: 12/21/2010
William C. Gosnell, Attorney at Law
William C. Gosnell, Attorney at Law | William C. Gosnell
You can file bankruptcy, but you have too much income and not enough debt for a chapter 7. You can file a chapter 13 and pay off debts through a monthly payment of about $750.00 per month.
Answer Applies to: Tennessee
Replied: 12/21/2010
Greifendorff Law Offices, PC
Greifendorff Law Offices, PC | Christine Wilton
The answer is: it depends. It depends on your goals; how many people live in your household; your income and household expenses; whether you have money left over at the end of the month.....etc. You may need to file under chapter 13 and only a consultation with an attorney will you know your best course of action. Most consultations are free. Be sure to talk to several before you hire an attorney as advice will differ...strangely enough.
Answer Applies to: California
Replied: 12/21/2010
    Carballo Law Offices
    Carballo Law Offices | Tony E. Carballo
    Your occupation has nothing to do with whether or not you can file for bankruptcy. School District which are governmental agencies cannot discriminate against anyone that files for bankruptcy. The amount of your salary might disqualify you from being able to file a Chapter 7 case and require that you file under Chapter 13. It will depend on whether your income is above or below the median income for your area depending on the number dependents you have. Depending on how many dependents you have and where you live you might or might not be able to file under Chapter 7. You might need to do what is called the "means test" in form B22A to determine your eligibility for Chapter 7. That requires consideration of your gross income, payroll deductions, secured debt such as mortgage and car payments, contributions to retirement plans, charitable contributions, etc. It gets a little complex if you need to do the means test so definitely should have an attorney represent you. You should have an attorney under in all cases but even more important if you are an above median income earner.

    Your student loans are almost never dischargeable if you have any of those. You have to be pretty much permanently unable to earn a basic living wage.

    Chapter 7 does not affect secured debt such as the mortgage on the condo. You will be able to keep the condo so long as you pay the mortgage on it and if you don't it is the mortgage company who will take it away through foreclosure sooner or later.

    Bankruptcy will not affect your interest in the condo nor your friend's interest. Your friend's credit rating will not be affected by your bankruptcy.

    The only thing is that you should be prepared to send the payments for the mortgage by mail once you file since banks typically cancel automatic withdrawals for mortgage payments because they believe that automatic withdrawals violate the automatic stay imposed by the Bankruptcy Court when you file for bankruptcy. That's not a big problem. You just mail in your payments as usual. Usually they will send you a letter telling you where to send the payments and giving you the opportunity to sign up again for automatic withdrawals from a bank account.
    Answer Applies to: California
    Replied: 12/20/2010
    Steven D. Keist, Attorney at Law
    Steven D. Keist, Attorney at Law | Steven D. Keist
    Yes if you meet the Means Test criteria.
    Answer Applies to: Arizona
    Replied: 12/20/2010
    Janet A. Lawson Bankruptcy Attorney
    Janet A. Lawson Bankruptcy Attorney | Janet Lawson
    Being a school teacher has nothing to do with it. Not likely you can file a chapter 7 with that kind of income. You should see a lawyer who can get you the maximum deductions on the "means test." Your friend will not be affected.
    Answer Applies to: California
    Replied: 12/20/2010
    The Shakoori Law Group
    The Shakoori Law Group | Rachelle Shakoori
    It really depends on many factors such as your household size, amount of secured debts, etc. A competent attorney should help you get qualified if certain factors are met. As far as the property you own, if the entire monthly payments are not being paid, regardless of your chapter 7 bankruptcy, the property will be foreclosed. Your liability will be wiped but they can still may go after her.

    I highly recommend that you retain an experienced bankruptcy attorney in your jurisdiction to guide you through the complexities of bankruptcy law and procedure
    Answer Applies to: California
    Replied: 12/20/2010
    The Law Office of Mark J. Markus
    The Law Office of Mark J. Markus | Mark Markus
    Yes, school teachers are allowed to file for bankruptcy. Whether or not you are eligible to file depends on a number of factors and can only be determined after a comprehensive consultation with a bankruptcy attorney.

    Whether bankruptcy would affect the co-tenants on your condo depends on what you intend to do with it, whether payments are current, it's value, amounts owed against it, etc. etc.
    Answer Applies to: California
    Replied: 12/20/2010
    Law Office of L. Paul Zahn
    Law Office of L. Paul Zahn | Paul Zahn
    The fact that you have a job does not prevent you from filing for bankruptcy, but you have to pass a means test in order to file for Chapter 7 bankruptcy. If you don't qualify for Chapter 7 (liquidation) you can possibly qualify for Chapter 13 (payment plan). Remember that school loans are not dischargable in bankruptcy. As for your property issue, the bankruptcy court only has jurisdiction over your property, so your friend's half and credit score should be unaffected.
    Answer Applies to: California
    Replied: 12/20/2010
    Law Offices of Lady Justice
    Law Offices of Lady Justice | Mona Patel
    First of all, you cannot erase away student loans in a bankruptcy. I hope that helps you determine if you should or need to file.

    Secondly, your bankruptcy filing will only affect your credit score. It will not interfere with anyone else's credit report for the tenancy in common.

    In order to see if you qualify for a bankruptcy, we would need to analyze your current expenses and debts and compare it to your salary. You do not need to worry about any public records if you are a school teacher. Everything is very confidential.
    Answer Applies to: California
    Replied: 12/20/2010
    Diefer Law Group, P.C.
    Diefer Law Group, P.C. | Abel Fernandez
    Yes, you can file. If you are current in your mortgage payment your case will not affect your friend. I do, however, still recommend that you seek legal advice. This is a case where you really need advice from an attorney.
    Answer Applies to: California
    Replied: 12/20/2010
    Bankruptcy Law Office of Robert Weed
    Bankruptcy Law Office of Robert Weed | Robert Weed
    Getting a single person making $72,000 approved for a Chapter 7 would be VERY tough. The bankruptcy means test depends on the median income in your state which you are almost certainly above anywhere in the country. Some of the expenses you are allowed are local. They key one would be the actual housing expense of your condo. Your actual medical expenses, if high, would also help you qualify. And it you are helping an elderly family member your mother for example.

    You are not going to be able to do anything about those student loans. Some courts would allow you to use the student loan payment to show you are eligible for a Chapter 7, but most (I believe) do not. You have an uphill climb and need to talk to a really good lawyer in your area.

    On the good news side, your co-owner of the condo should not be affected.
    Answer Applies to: Virginia
    Replied: 12/20/2010
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