Does My Income Impact Which Type of Bankruptcy I should File For?

Posted by

0

The answer to this question: Yes, it does.

Chapter 13 bankruptcy is also called a Wage Earner’s Bankruptcy. The payment plan put in place when you file for a Chapter 13 requires that you have some means of paying off your debts over a designated period of time.  That could be a wage or salary from employment, or it could be from Social Security or alimony, but you need to prove that you will be able to make the payments.

Chapter 7 bankruptcy has an income limit, which means you can’t file for a Chapter 7 if you make a certain amount of money. This is usually the ideal plan for unemployed people.

(sladerlawfirm.com)

What Bankruptcy Cannot Do

Posted by

0

 Here’s what bankruptcy cannot do for you:

Stop secured creditors from repossessing property. A bankruptcy discharge eliminates debts, but not eliminate liens. Thus, secured debts, or debts where the creditor has a lien on your property and can repossess it if you don’t pay the debt, cannot be discharged. The actual debt may be eliminated, but the creditor may still repossess their property.

Eliminate child support and alimony payments. Child support and alimony obligations are not erased by bankruptcy and the filer will continue to owe these debts in full, just as they were owed before filing. And if you use Chapter 13, your plan will have to provide for these debts to be repaid in full.

Wipe out student loans, except in very limited circumstances. (See previous post for information on student loan discharge.)

Eliminate many tax debts. Eliminating tax debt in bankruptcy is difficult, but sometimes possible for older debts for unpaid income taxes. Ask your bankruptcy attorney for specifics pertaining to your case.

Eliminate other forms of nondischargeable debts. The following debts cannot be eliminated under either type of bankruptcy:

  • Debts you neglected to list in your bankruptcy papers, unless the creditor learns of your bankruptcy case.
  • Debts for personal injury and/or death resulting from intoxicated driving.
  • Fines and penalties imposed for violating the law, such as traffic fines and criminal restitution.

Filing for Chapter 7 will mean that these debts will remain when your case is finished. Filing for Chapter 13 will allow you to repay these debts in accordance with your payment plan. If they are not fully repaid, the balance will remain at the conclusion of your case.

In addition, there are types of debts may not be eliminated if the creditor convinces the judge  so. These include fraudulent debts, incurred, for example, if you lie a credit application or pass off borrowed property as your own to use as loan collateral.

(www.nolo.com)

Student Loans CAN be Forgiven

Posted by

0

If you want to get your student loans forgiven when you file bankruptcy, these are the steps you must follow:

I. You have to request loan forgiveness.

  • According to a Harvard law school study, 99% of those that have educational debt and file bankruptcy don’t ask for student loan forgiveness.
  • 40% of people who request relief from student loans  are granted at least partial loan forgiveness.
  • 70,000 people qualify every year to discharge some or all of their student loan debt when they file bankruptcy.

II. You must qualify for loan forgiveness. The most common test to see whether or not one qualifies for student loan relief is the Brunner Standard. It has three components:

  • Repaying your loans will render you unable to maintain a minimal standard of living for you and your family.
  • Your financial circumstances that prevented you from being capable of paying your student loans is likely to continue through the rest of your repayment term.
  • You have made “good faith efforts” to repay your student loans.

III. You must file an adversary proceeding. Other debts, such as mortgage debts, are typically included in your bankruptcy filing, but student loan debt requires a separate proceeding by your bankruptcy attorney.

  • This is actually a separate lawsuit in tandem with a routine bankruptcy filing.
  • It’s a process in which the filer sues the student loan creditor(s) to get partial or total debt forgiveness.

IV. You must file for a Chapter 7 bankruptcy.  Chapter 13 bankruptcy gives the filer a debt repayment plan that offers a discharge of some of your unsecured debts (credit card, medical bills, etc.) after a repayment period of three years. Chapter 7 allows immediate forgiveness of all unsecured debts (except student loans, child support and alimony).

  • Chapter 13 may give you lower payments on your student loans for a few years,, but it does not provide long-term relief.
  • Filing for a Chapter 13 can actually cause your loan balances increase due to unpaid interest capitalizing during your repayment period.
  • If approved, your Chapter 7 adversary filing may result in partial or total student debt relief.

 (tuition.io)

Behind on Your Mortgage: How Chapter 13 Can Help

Posted by

0

One of the main reasons people file for Chapter 13 bankruptcy plans is because they are facing mortgage default and foreclosure on their homes.

Filing for Chapter 13 puts a stay into effect immediately. The stay prohibits the mortgage lender from selling your house or making any more efforts towards collection.  The lender can’t foreclose on your property based on any pre-filing missed payments or debts, However, you must continue with payments through your Chapter 13 payment plan, and if you miss any payments after the filing of your Chapter 13, the court may lift the stay and allow the foreclosure proceedings to proceed.

The purpose of Chapter 13 is to reorganize your debt in order to make paying it off manageable. This means that if you want to keep your property, you must pay off all mortgage payments through your payment plan. These plans can last up to five years, and is an effecient way to stop a foreclosure and provide with a reasonable way to catch up on missed payments.

(nolo.com)

Advantages to Filing a Minnesota Chapter 13 Bankruptcy Plan

Posted by

0

  1. You can keep all your property, both exempt and non-exempt, if you can afford the process.
  2. Debts are reduced under a Chapter 13 payment plan, although not often canceled as they might with a Chapter 7 discharge.
  3. You have, effective immediately, protection against any creditor’s wage garnishment or collection efforts.
  4. Under Chapter 13, most incurred debts are dischargeable, including credit card charges and debt incurred from fraud before filing.
  5.  All co-signers of the Chapter 13 payment plan are immune from the creditor’s efforts if the plan provides full payment.
  6. If the terms of the plan are met, you have protection from foreclosure on your property.
  7. There’s more time to pay off debts that cannot be discharged by either Chapter 7 or Chapter 13, like child support or taxes.
  8. You can file for a  Chapter 13 at any given time, and you can do so repeatedly.
  9. You can separate your creditors by class to give different creditors different payment percentages. This enables you to treat debts you incurred by yourself differently than those with which you have a co-debtor.

4 Pros of Filing for Chapter 7 Bankruptcy

Posted by

0

1. Even though filing for bankruptcy can affect your record for years, it only takes about three to six months to complete the process under Chapter 7, from initial filing to relief from debt. If you have difficulty rationalizing the trade-off of freedom from debt for a long-lasting mark against your credit, remember that missed payments, repossessions, defaults, foreclosures, and lawsuits will also hurt your credit, and are much more expensive and hurtful to your ability to borrow money than declaring bankruptcy.

2. Most state exemptions in bankruptcy allow you to keep most of your possessions after declaring bankruptcy, sometimes giving you more coverage to keep your property than necessary. In addition, you will get to keep your salary or wages and any property you posses after filing for Chapter 7.

3. Declaring bankruptcy now can help you start to rebuild your credit sooner. And even though you can legally file for Chapter 7 bankruptcy once every six years, you can get a Chapter 13 plan if the need arises before you are eligible for another Chapter 7. You may file for Chapter 13 as many times as needed, although each filing will appear on your permanent record.

4. If you don’t owe money on the type of debts that withstand filing bankruptcy, the value and number of debts that you can be relieved from by a bankruptcy court is potentially limitless.

Today’s Question:

Posted by

0

Is our community being served by Personal Injury Attorneys that are currently in practice or are we being taken advantage of and looked at as a commodity rather than a community?

Mr. Crutchfield attended 2014 NACBA Conference in NYC April 10-13

Posted by

0

Carleton at NACBA

Mr. Crutchfield attended the 2014 NACBA (National Association of Consumer Bankruptcy Attorneys)Conference held in New York City on April 10-13. During the conference, Mr. Crutchfield obtained valuable information on current bankruptcy laws, current/updated bankrupcty procedures and new insight to enhance the bankrupcty experience for all his clients in Minnesota.