Good Faith Bankruptcy – What is a good faith bankruptcy and why do we care so much about it? Here’s the issue – the bankruptcy code requires that a debtor’s petition is filed in “good faith”. However, whether a person has filed their petition in good faith is subjective and a test by the Court can not begin to address all of the reason’s a petition is filed in good faith and in bad faith. But generally, the Court historically looks at the 11 factors there were presented in the case of In Re Kull, 12 B.R. 659 (S.D. Georgia 1981.) Following is a list of the the 11 factors the Court considers when determining a good faith bankruptcy:
- the amount of the debtor’s income from all sources (for example was all the income disclosed);
- the living expenses of the debtor and his dependents;
- the amount of attorney’s fees
- the probable or expected duration of the Debtor’s Chapter 13 plan;
- the motivations of the debtor and his/her sincerity in seeking relief under the provisions of a Chapter 13 bankruptcy;
- the Debtor’s degree of effort (for example, did the debtor complete all the schedules);
- the Debtor’s ability to earn and the likelihood of fluctuation in his earnings;
- special circumstances such as inordinate medical expense;
- the frequency with which the has sought relief under the Bankruptcy Reform Act and its predecessors (has there been multiple filings);
- the circumstances under which the Debtor has contracted his debts and his demonstration bona fides, or lace of same, in dealing with his creditors; and
- the burden which the plan’s administration would place on the trustee.
Good Faith Bankruptcy – For more information about Bankruptcy Laws, contact the Remboldt Law Firm at 404-348-4081. Free consultations can be scheduled by calling 404-348-4081. If bankruptcy is a good solution for your financial concerns, payment plan are available if needed and weekend appointments are also available.