Philadelphia Bankruptcy Lawyer Blog

The Means Test is a way of making sure that a debtor who seeks a discharge through Chapter 7 bankruptcy is not "abusing the system." In fact, the law does use the term "abuse" in connection with the means test formulation. Consider that, as a general statement, it would be "unfair" for people who make a million dollars a year to file a bankruptcy and receive a quick discharge. To do so, using the language of the law, would mean that a "presumption of abuse" exists. To overcome this presumption, the Means Test is filled out to show that the debtor is, indeed, using the law as it was intended: non-abusively.

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In what might be deemed an ominous trend, Americans seem to be taking on additional debt (most likely as credit card debt) to pay for the expenses of daily living. This approach to money management, while not ideal, can be appropriate in the short term or in individualized situations of growing income, but when the trend is nationwide and a booming economy is nowhere near the horizon, this local bankruptcy lawyer is troubled. The situation is even scarier where consumers dip into retirement accounts just to survive. The reason for this angst is that bankruptcy presents a real, viable alternative to those struggling with debt.

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Discussed in this blog on September 30, 2011, was the news that Friendly's Ice Cream was headed to bankruptcy. Indeed, the company did file for Chapter 11 bankruptcy protection on Wednesday, October 5, 2011. It emerged -- as is the goal in Chapter 11 bankruptcy -- leaner, more capitalized, and ready to do business anew this week. There were not consequences, however. Thirty-seven restaurants were closed for good on Sunday night and the former owner, Sun Capital Partners, is owed $267.7 million dollars as part of the restructuring.

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