A debt reorganization bankruptcy, also known as chapter 13 bankruptcy, allows people in debt to restructure their finances and dedicate their future “disposable income” towards repaying past debts. In bankruptcy payment plans, the debtor(s) has the ability to restructure their debts, prioritize what is important, and make a single monthly payment which then gets divided up to prescribed parties by a bankruptcy trustee.
The good news about Chapter 13 bankruptcy is that your life does not need to remain at a standstill once we file your case. You are allowed to live! Get married! Get pregnant! Move! We can always adjust your Chapter 13 plan through what is called a motion to modify the plan.
The co-debtor stay is a nice feature of chapter 13 bankruptcy. When an individual files a bankruptcy case, there is an automatic “stay” that is put in place by the Bankruptcy Court. The automatic stay prevents creditors from collecting against a bankruptcy debtor. In chapter 13 that stay can also, in many cases, extend to co-signers and joint account holders. As long as the chapter 13 case is pending, other people obligated on debts that are “in” a chapter 13 case can be protected by the same automatic stay.
Most people never need to hire a lawyer, and when they do, it’s usually at a time of their life that is filled with stress and uncertainty. As a result, meeting with a lawyer a lawyer is often something that people approach with a lot of trepidation. It’s no different when someone is considering filing for bankruptcy. You’re already being harassed by creditors and debt collectors, you may be facing foreclosure, and other legal actions. The idea of meeting with a complete stranger to discuss your financial situation is, at a minimum, daunting. However, it’s important to remember that our Minnesota bankruptcy law firm is here to help you get through these difficult times and make a fresh start.
Clients often come to us unsure of whether bankruptcy is the right option for them, or whether they can file bankruptcy at all. If you’ve previously filed for bankruptcy, or if you think you may need to file more than once, this question becomes more complicated. The simple answer is yes, you can file for bankruptcy again, but the timing and other details are important.
I’ve written in earlier blogs about the decision-making involved in deciding whether filing a chapter 7 bankruptcy case or a chapter 13 bankruptcy case is the best choice for a particular client.
In the last few blogs, I’ve written about the choices people who are in a chapter 13 bankruptcy case have when, for whatever reason, the chapter 13 plan payments have become difficult to afford. I wrote about simply catching up on past-due payments, or setting up a structured repayment plan, called a cure order, when the financial problem facing a chapter 13 debtor is temporary. In my last blog, I looked at plan modification, a restructuring of the chapter 13 plan, in cases where post-bankruptcy-filing financial problems are more permanent and profound.
Individuals who desire to reorganize their debts under Chapter 13 of the United States Bankruptcy Code must file a proposed Chapter 13 repayment plan. As part of the Chapter 13 repayment plan, you will propose to the court and your creditors how you intend to repay your debts (often times unsecured debts only get paid pennies on the dollar-and the balance owed gets discharge, i.e. wiped out, tax free). In order to be eligible to file a Chapter 13 case, you must have a regular source of monthly income, such as wages from employment or income from self-employment, social security, pension or other reliable source that can be verified by the court. Some debtors may be able to demonstrate regular assistance from family members to satisfy the income requirements to file for Chapter 13 relief.
When you file a bankruptcy, you must include all debts; however, not all debts are treated equally in a Chapter 13 case. For example, student loans and taxes (there are exceptions to this!) are non-dischargeable debts that survive the bankruptcy. This means the debtor is still legally liable for paying the student loans and taxes if the debts are not paid in full through the bankruptcy plan. Unsecured debts may only receive a percentage of what is owed and any balance remaining at the end of the repayment period is discharged forever. To complicate matters, tax claims are generally unsecured debts but they are afforded priority status and paid after secured claims but before general unsecured claims. As you can already see, secured debt and unsecured debt get treated differently in a Chapter 13 bankruptcy case, and it can be a bit confusing to comprehend. With this blog I am hoping it make it a little simpler, to give you a better idea of how your debts would be handled in a Chapter 13.
Struggling with credit card debt is stressful and confusing, but it doesn’t have to be. There are options for consolidating and eliminating your debt, including filing for Chapter 13 bankruptcy. Most clients ask, “Why choose Chapter 13 over hiring a debt consolidation company?” The answer is simple, Chapter 13 allows you to put you and your family ahead of your creditors. Let me explain.
The first thing that happens when you file bankruptcy is you feel an immediate sense of relief. Why? Because as soon as you file a bankruptcy, your creditors are banned from contacting you to collect on a pre-existing debt. There is peace in the valley, your phones no longer lite up and your mail box is full of junk mail - NOT bills!
Most Minnesota families live hand to mouth. Almost half of the households in America cannot cover a $400 emergency expense. Most secured debt payments, like rent, mortgage, or auto loans, are three or four times that amount. In other words, just one missed installment can mean a world of hurt. Most people lack the means to make catchup payments.
Most moneylenders begin adverse action, including the dreaded acceleration notice, after just two or three missed payments. An acceleration notice demands the entire loan balance immediately; the lender will no longer accept partial payments. In situations like this, a federally-guaranteed debt repayment plan is probably your best option. Almost everything you need to know about a Chapter 13 bankruptcy is described below.
Hi everyone! So you are on line searching for information on the basics of bankruptcy. How does it work? What are the differences between a chapter 7 and a chapter 13? Which bankruptcy looks better on my credit report? These are all great questions right? But, can someone explain them in simple terms? I can!
Last week I wrote about why being able to file a chapter 13 bankruptcy case quickly is advantageous to debtors. Chapter 13 is often the “emergency” bankruptcy - in many cases that end up being filed as chapter 13s, a mortgage foreclosure is days away, or the repossession agent has been out looking for a client’s car to repossess. Or in some cases, the repossession has already taken place and the owner has a short period of time in which to redeem the vehicle prior to the vehicle being sold at an auction. So there are numerous situations in which time matters, and the time is short. Being able to file quickly is an advantage - and at Kain & Scott we can file a case quickly and professionally. So the question is, what is there about the Kain & Scott law firm that enables the firm to file a case quickly?
I am amazed at the number of Americans that don’t know the government actually has a government sponsored debt consolidation plan for you! It’s called a Chapter 13 Bankruptcy and it is amazing! The number of benefits of being in a government sponsored debt consolidation plan cannot be understated.
