In A Chapter 7 What Happens To Property I Cant Protect From My Creditors
In a Chapter 7, property you cant protect from your creditors is sold and the money is used to pay your creditors. If property you own free and clear is worth more than you can protect from your creditors, you should probably not file a Chapter 7. If you have property you cant protect from your creditors, you may want to think about filing a Chapter 13. If you think you have more than $25,000 in property for an individual or $50,000 for a married couple, you should consult counsel prior to filing bankruptcy to see if there are additional exemptions which may protect the rest of your property.
In A Chapter 13 Bankruptcy What Happens To Property Im Buying On Credit
In a Chapter 13 bankruptcy, you may not have to give back, reaffirm, or redeem property youre buying on credit. Instead, you may be able to keep property youre buying on credit even if youre behind on payments. To keep the house where you live, you must make current payments. You get three to five years to catch up on missed payments.
Whether you may keep other property youre buying on credit depends on what you are buying and when you bought it. To keep a motor vehicle you bought within 910 days before you filed bankruptcy, you must pay the debt in full within three to five years. To keep a motor vehicle you bought more than 910 days ago, you get three to five years to pay the debt, or to pay what the vehicle is worth, whichever is less.
To keep other property you bought within one year before you filed bankruptcy, you must pay the debt in full within three to five years. To keep other property you bought more than one year ago, you get three to five years to pay the debt, or to pay what the property is worth, whichever is less.
Do I Have To List All My Creditors Can I Keep One Of My Credit Cards Open
You need to list all creditors that have a balance on the date of filing. There is no way to get around that the court does not allow picking and choosing of debts in bankruptcy. If you want to keep a credit card open there is a chance that if it has a zero balance when your case is filed, the credit card company may not close that account. There is no way to guarantee that happens.
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The Automatic Stay Isn’t Always Automatic
Filing a bankruptcy within one year of the dismissal of a previous case comes with consequences: The automatic staythe order that stops collection activitywill last only for 30 days. Your attorney will need to file a motion asking the court to extend the automatic stay to protect you the entire time you’re in bankruptcy.
Also, if you’ve had more than one bankruptcy in the last year, the automatic stay won’t attach at all, and your attorney will need to file a motion asking the court to impose the stay on your creditors.
How Many Times Can You File Chapter 13
Sometimes life can go from bad to worse. You file for Chapter 13 bankruptcy, dig out from under your debts, then a short time later, you lose your job or something else goes wrong. Your fresh start isn’t so fresh anymore, and you need to file again. There’s no limit to the number of times you can file for Chapter 13 protection, but you can only do it so often.
How Often Is Chapter 7 Denied
Frequency of Denial While some Chapter 7 bankruptcy cases are kicked out of court before discharge, statistics indicate that this isnt the norm. According to the U.S. Courts website, when Chapter 7 cases are correctly filed, they result in a successful discharge of debts more than 99 percent of the time.
What Debts Cant Be Discharged In Bankruptcy
Some debts cant be discharged in either a Chapter 7 or Chapter 13 bankruptcy. These include the following things:
- Fines and court ordered restitution,
- Taxes for which no return was filed, taxes for which a fraudulent return was filed, as well as some other taxes,
- Child support, spousal support , and non-support obligations resulting from a divorce or separation,
- Debts due to fraud,
- Debts due to wrongful and harmful acts,
- Loans from your pension plan, and
- Student loans, unless you can show extreme hardship. It is nearly impossible in West Virginia to show extreme hardship.
You cant discharge credit card charges or other installment contract purchases to a single creditor totaling more than $550 for luxury goods or services you bought within 90 days before you filed bankruptcy. You also cant discharge cash advances totaling more than $825 you got within 70 days before you filed bankruptcy. Thus you should always quit using credit for at least 90 days prior to filing a bankruptcy.
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Preventing Bankruptcy Exemption Problems
Exempt your property carefully. The bankruptcy trusteethe court-appointed official assigned to manage your casewill review the exemptions. A trustee who disagrees with your exemptions will likely try to resolve the issue informally. If unsuccessful, the trustee will file an objection with the bankruptcy court, and the judge will decide whether you can keep the property.
Example. Mason owns a rare, classic car worth $15,000, but the state vehicle exemption doesn’t cover it entirely. Believing that the car qualifies as artat least in his mindMason exempts it using his state’s unlimited artwork exemption. The trustee disagrees with Mason’s characterization and files an objection with the court. The judge will likely decide the vehicle doesn’t qualify as art.
Purposefully making inaccurate statements could be considered fraudulent. Bankruptcy fraud is punishable by up to $250,000, 20 years in prison, or both.
How Long Does A Bankruptcy Case Take
A typical no-asset Chapter 7 case can take between 3 to 5 months from filing date to discharge of the case. If there are assets to be distributed during the case it can be open much longer, depending on the assets involved and whether the Trustee overseeing the case can find buyers for the assets. A Debtor would still receive his or her discharge at the normal time, even if there are assets to sell.
The biggest thing that prolongs a Chapter 7 case is the selling of real estate.
A Chapter 13 case is a repayment of debts that lasts between 3 and 5 years, depending on the specifics of the confirmed plan.
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What Happens If I Make A Mistake In My Bankruptcy Papers
Both you and your bankruptcy attorney have to make a reasonable investigation to be sure that everything in your bankruptcy papers is correct. If you or your attorney dont do this, either or both of you may be ordered to pay costs and attorneys fees to your creditors. However, no fees and costs can be assessed against an attorney who represents a debtor with household income below the state median. Fees and costs also cannot be assessed against an attorney who represents a debtor in a Chapter 13 bankruptcy.
What Is Chapter 7 Bankruptcy How Does It Work
Forget any preconceived notions you have about what it means to file for bankruptcy. Bankruptcy is far more common than you’d ever imagine. For many people, it’s their opportunity for a fresh financial start.
Chapter 7 bankruptcy in Virginia is designed to get rid ofor “discharge”most of your debts. A Chapter 7 bankruptcy trustee has the right to gather up your unprotected assets, sell them, and then use that money to pay creditors according to the federal Bankruptcy Code. Don’t worry though, you will be allowed to protect virtually all of your property. After that, most of your remaining debts will be discharged.
One aspect of Chapter 7 bankruptcy that many people love is that once they have filed a petition for bankruptcy, the creditors have to leave them alone. Debt collectors are notified that you’ve filed for bankruptcy, and they cannot call you to demand payment, proceed with a lawsuit, or garnish your wages. This also includes your house, so if your property was currently under threat of foreclosure, filing for bankruptcy can temporarily stop that.
Once you’ve received a discharge, it will release you from liability for most debts. There are some exceptions such as debts for alimony , child support, taxes, student loans, debts for willful injury by the debtor to another person, and debts for injuries caused by the debtor’s drunk driving. Secured creditors may also have the right to seize property after a discharge is granted.
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Qualifying For Chapter 7 The Means Test: An Insight By Eastern District Of Virginia Bankruptcy Lawyers
The key to qualifying for a Chapter 7 bankruptcy is to prove that you do not have sufficient income to make payments to your creditors. In order to proceed in Chapter 7 you must pass the means test, which determines whether you have any disposable income to pay creditors by looking at your monthly income and expenses.
Once this is demonstrated and you decide Chapter 7 is right for you, it is important that you consult with a lawyer to make sure that you utilize the Bankruptcy Code provisions and Virginia statutes to exempt as much property as possible from the bankruptcy liquidation. According to our Eastern District of Virginia Bankruptcy lawyers, this will allow you to obtain a discharge of all debts yet keep some if not all of your property.
After Chapter 13 Dismissal
As a continuation of the above example, say a circumstance arises and you’re not able to make the payments on your Chapter 13 repayment plan. Usually, when that happens, you won’t be granted a discharge of your debts unless you’re eligible for and request a hardship discharge. Instead, your case will be dismissed.
If your Chapter 13 case is dismissed, you can file another case right away. For strategic reasons, some debtors will file and dismiss several cases in quick succession. This isn’t necessarily a good idea, but it is possible.
The debtor, facing a threat to their property, files the bankruptcy case to stop a repossession or foreclosure. When the danger passes, the debtor will either ask the court to dismiss the case or more likely, stop making plan payments, which will result in a dismissal.
When the creditor renews its collection efforts, the debtor files a new case. To combat debtors who game the system in this way, Congress included provisions in the Bankruptcy Code that allow debtors to file new cases. But, the Bankruptcy Code also limits how the debtor can use the automatic stay in such situations.
Who Should File Chapter 13 Bankruptcy
Many people think of bankruptcy court as the final stop on a path to financial ruin, the only option left when repaying debts seems impossible. But theres hope even in bankruptcy, and Chapter 13 of the federal bankruptcy code offers the closest thing to a soft landing.
Sometimes called the Wage Earners Bankruptcy, Chapter 13 allows those with enough income to repay all or part of their debts as an alternative to liquidation. Its bankruptcy for those whose biggest problem is dealing with creditors demands for immediate payment, not lack of income.
One of its most attractive features is the chance to keep your home after Chapter 13 bankruptcy as long as you can pay the mortgage and any amount required by your Chapter 13 repayment plan..
Under Chapter 13, people have three to five years to resolve their debts while applying all their disposable income to debt reduction. The option allows applicants to eliminate unsecured debts while catching up on missed mortgage payments. Short-circuiting home foreclosure is one of the options most attractive features. Though keeping your home can be a major relief, youre required to spend years living under the supervision of a court-appointed trustee who will collect and distribute your payments.
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What Is A Discharge
A discharge of your debts in bankruptcy means that all of your pre-petition debts are eliminated. You can read more about it here.
Once you obtain a discharge, you will have no legal liability or duty to repay your debts and creditors can no longer pursue collection of these debts from you.
If they do continue to pursue collection, this is a violation of federal law and will subject them to sanctions. There are a few ways that a debtor can be prevented from obtaining a discharge, one of which is if there is a finding that the Chapter 7 filing was abusive. The key to preventing the Trustee from pursuing an abusive filing is to be upfront about your financial status and to provide all necessary information in the bankruptcy schedules.
Will My Credit Score Go Up After Chapter 7 Discharge
So, they think their credit score might increase after bankruptcy discharge. Unfortunately, making regular debt payments is the only method that could improve your credit. But, you can still start working on raising your credit score immediately after a bankruptcy. Your score wont go up right away.
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Additionally If You File Bankruptcy More Than Once In A Year And Dismiss It The Benefits Of Filing May Be Limited
The extent of which will. You can file for bankruptcy any number of times Many people need to file bankruptcy you can file chapter 13 immediately after receiving a chapter 13 discharge, but you will not be eligible to receive a bankruptcy discharge in the new case. When you file under different chapters (chapter 13 first. If you’re worried about your current financial situation and have been asking others how often can you file bankruptcy. Learn if you qualify there are two chapters of bankruptcy most often used by consumers, chapter 7 and chapter 13. How often can i file bankruptcy? example: For instance, chapter 13 bankruptcy will stop collection actions an allow the filer to spread out nondischargeable debt (debt you can’t wipe. If you’ve filed for bankruptcy before, you’ll have to meet certain requirements before you’ll be eligible to receive a debt dischargeâthe order that wipes out qualifying. You might file bankruptcy to give yourself a fresh start, but life can always throw you a curveball in which something unprecedented and unavoidable happens. Bankruptcy is a legal protection available to qualified individuals and businesses that need to discharge or reorganize their debt. Declaring bankruptcy more than once is restricted by the united states in terms of time. Complaints seeking revocation of discharge will require retaining counsel.
Dealing With Your Car
Your car is considered and asset in your Virginia bankruptcy and if it is not yet paid off, then it is also a liability that has to be dealt with in a way that best sets you up for your fresh start. You can choose to surrender the vehicle to get out from under the loan, or you can reaffirm the debt and keep everything essentially the same. A reaffirmation agreement means that you will continue to be responsible for paying the car loan even after your discharge is entered. If you fail to make all payments as agreed, then the bank can still repossess your vehicle and, since the debt was not discharged, sue you for the balance left owing after the vehicle is auctioned off. If your car is paid for then depending on its value and the exemptions available for folks filing Chapter 7 in Virginia nothing at all may change.
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Filing Chapter 13 After A Chapter 13 Discharge: 2 Years
If you had a Chapter 13 bankruptcy discharge and are looking to file again, you must wait two years from the previous filing date.
While this is the shortest time allowed between any two filings, it is also the rarest sequence because a Chapter 13 restructuring typically takes three or five years to repay. But a Chapter 13 can sometimes be discharged early due to additional extreme hardship.
How Long Does It Take To Rebuild Credit After Chapter 7
It is still possible to achieve a credit score of 700 or more within two years after filing for Chapter 7 bankruptcy. It requires dedication, timing, and patience to achieve that. In order to achieve this you must follow these steps:
Check your score
Apply for a loan that builds credit
Apply for a credit card
Get another credit card
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