Attorney Leigh Faugust and I just got back from the annual convention of the National Association of Consumer Bankruptcy Attorneys. We met in San Francico, along with twenty four other bankruptcy attorneys from Virginia and 1600 attorneys from across the country.
We attended 14 hours of classes, had dinner with old and new friends, traded ideas and strategies late into the night.
One thing I learned that surprised me.
We heard it from Mark Redmiles, Deputy Director of the Office of the United States Trustee. He’s the top guy nationally in charge of enforcing the “means test”. That’s the formula Congress put in place in 2005, to block chapter 7 bankruptcy for people who supposedly can afford to pay.
Redmiles reported that one only out of every eight chapter 7 bankruptcies approved nationally was filed by bankruptcy attorneys for people who did not have automatic Chapter 7 eligibility.
People have automatic eligibility if they earned less than the median income for their family size. In Virginia, those median income numbers are:
|Family size one two three four|
Virginia $48,190 $64,890 $73, 887 $85,633
Only one out of eight bankruptcies approved nationally as Chapter 7 are over the numbers for their state.
Five out of eight of my approved Chapter 7’s are over. That’s five times the national average!
What is going on? Northern Virginia is a high income and high cost of living area in a low income state. The automatic eligibility formula that bankruptcy attorneys use to get most bankruptcies approved, usually doesn’t work here.
But experienced bankruptcy attorneys do get people here approved. They get approved using the long formula means test–taking every time in your budget, compared to the allowances for that item, and using the ones we can to show the court why you can’t afford to pay.
The 2005 bankruptcy law made details very important. But, they are more important here in Northern Virginia than almost anywhere else. And it’s more important here than most places to have experienced bankruptcy attorneys on your side.