Your Home And Bankruptcy
Home ownership and Chapter 7 can be a dangerous situation. This is particularly true here in the Bay Area with a real estate market that can be downright insane. Mind you, that Chapter 7 can be a minefield and if you go into a Chapter 7 and you have not properly considered certain essential facts about your situation, you could be in for a rude awakening.
Now, it is safe to say that many many people have filed Chapter 7 while owning a home and everything goes fine. If you do not have equity in your home, then it is likely a Chapter 7 will not create any trouble.
The real issue for people in Chapter 7 when they own a home is when we start to see equity. And in San Jose, this is starting to become more of a concern. The real estate market has bounced back some. People now feel as though the values of their home may be increasing. Can they still file for Chapter 7? It depends.
You see in bankruptcy, we have these things called exemptions. You get to claim these exemptions to protect your property from your creditors. Imagine you owe $50,000 in credit card debt and $50,000 in medical bills. These debts are enormous, and only the very wealthy among us will be able to get out from debt this high without using the bankruptcy code. So here we are. But now imagine that you own a home that has $400,000 in equity. That would be nice. I hope you told your attorney about this before the case was filed.
More to come.
Eligibility To File A Chapter 7 Bankruptcy Case
In order to be eligible for a Chapter 7 case, you must receive credit counseling from an approved agency within 180 days prior to filing. When you file, you are required to provide the court with a certificate from the agency describing the services you received along with a copy of any debt repayment plan you and the agency may have developed. After you file, you will also have to complete an instructional course concerning personal financial management in order receive a discharge. Classes are run by independent agencies and require additional costs. A list of accredited credit counselors can be found at the United States Trustee’s website, .
Who Cannot File For Chapter 7
Filing for Chapter 7 bankruptcy is one way to solve debt problems, but it isnt available to everyone. Here are some situations in which you might not be able to use Chapter 7 to discharge debt.
You Can Afford a Chapter 13 Repayment Plan
Under the bankruptcy rules, filers with higher incomes must pay back some of their debts over time under Chapter 13 rather than liquidating their debts outright in Chapter 7. If the U.S. Trustee decides that your income, debts, and expenses indicate that you can afford a Chapter 13 plan under the rules, it will file a motion to have your case dismissed. The court is likely to grant that motion and throw out your case unless you convert to a Chapter 13 bankruptcy.
To figure out whether you can discharge debt in Chapter 7, you must first:
- determine your current monthly income
- multiply your current monthly income by 12, and
- compare that figure to the yearly median family income in your state for the same size household.
If your current monthly income is no more than the states yearly median income, your Chapter 7 bankruptcy wont be presumed to be an abuse of the bankruptcy process. However, if your actual income shown in Schedule I of your bankruptcy papers is significantly higher than your expenses you might still be forced into Chapter 13 .
You Have Marijuana Assets
Determine Your Current Monthly and Yearly Income
Use the Current Monthly and Yearly Household Income Worksheet , to calculate your household income by:
What to Do Next
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Preparing For Chapter 7 Bankruptcy
Theres some protocol to follow in the months before filing for bankruptcy. Failing to follow these instructions could undermine your efforts.
Dont Pay Creditors It seems counterintuitive and you should definitely make routine payments. But any large or unusual payments could be viewed as preferential transfers. That means one creditor has benefited unfairly over others.
No New Debt A new creditor could claim you took out a loan or ran up the balance on a credit card without intending to pay it back. Legally, thats fraud and it will not be forgiven.
No Unusual Transactions Dont stray from the routine. Dont transfer titles of cars or homes. Dont buy luxury goods. Dont transfer your business or remove your name from it. They can all be classified as fraud.
Be Truthful You are required, while filing for bankruptcy, to provide full and complete information. You must disclose any debt, assets, accounts or other financial information. Failure to comply could lead to fraud and potential criminal charges.
Dont Touch Retirement Funds You are generally allowed to keep retirement plans and accounts, so keep them safe while considering bankruptcy and dont use those funds to pay down debt.
Never think you can get away with something sneaky or dishonest. Your bankruptcy lawyer is always a good resource for what you should and shouldnt do.
When To Consider Filing Chapter 7
If youve tried negotiating with your creditors, working with a credit counselor or consolidating your debt, but are still struggling to manage your debt, Chapter 7 bankruptcy might be your last resort.
Chapter 7 bankruptcy can help by acting like a pause button for some of your debts. Once you file your petition, some of your creditors could be temporarily stopped from most collection actions against you or your property.
But filing Chapter 7 can ultimately mean losing some assets. The law varies from state to state, and each state can classify property as exempt or nonexempt . So depending on where you live, your home, stocks, other investments as well as other nonexempt assets you have could be at stake.
If youre concerned about what you may have to forfeit, talk to a lawyer. Some assets, including 401s and pensions, may be exempt.
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Milwaukee County Attorney Expedites Filing For Chapter 7 And Chapter 13 Bankruptcy
Don’t risk losing your most valuable assets. Get professional legal advice for your bankruptcy case and get a fresh start.
An experienced bankruptcy attorney can help you by:
- Identifying and completing all the necessary paperwork
- Researching Wisconsin bankruptcy laws
- Attending hearings
- Skillfully managing the entire bankruptcy process
Most people are simply not comfortable doing this. Dont risk that your bankruptcy petition will be dismissed, or delayed.
When time and money are critical, seek affordable, highly effective representation.
Its in your best interest to have our local bankruptcy attorney prepare your case, walk you through the entire process and present your case to the bankruptcy court.
Focusing only on Chapter 7 and Chapter 13 bankruptcy in Wisconsin, Milwaukee area attorney Steven R. McDonald has a nuanced understanding of the laws, qualifications and issues to help individuals with faster filing.
Get a free, no-pressure bankruptcy consultation with an experienced bankruptcy lawyer to learn more.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
Whether You Should File For Bankruptcy Without An Attorney Depends On The Type Of Bankruptcy And The Complexity Of Your Case
By Cara O’Neill, Attorney
You don’t need an attorney when filing individual bankruptcy, and filing on your own or “pro se” is feasible if the case is simple enough. But most people benefit from representation. In this article, learn:
- when Chapter 7 is too complicated to handle yourself
- why hiring a Chapter 13 lawyer is always important, and
- if you represent yourself, how a bankruptcy petition preparer can help.
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Be Wary Of Suing People Before Filing Chapter 7
Any legal claim you have is an asset in your bankruptcy case, even if the matter is unresolved or if the amount you’re entitled to hasn’t yet been determined. Even claims that you have against others you haven’t acted on are property of the bankruptcy estate. If you have a pending legal claim , talk to a lawyer before filing for bankruptcy.
How Soon Can You File For Chapter 13 After Chapter 7 Bankruptcy
In order to get debts discharged through Chapter 13, you must wait four years after filing a Chapter 7 bankruptcy.
You can file for Chapter 13 before four years if no debts were discharged in the Chapter 7 filing, but if you had debts discharged in Chapter 7 and want to have debts discharged in Chapter 13, you must wait four years.
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New York Bankruptcy Forms
Since New York bankruptcy cases are filed in federal court, a majority of the New York bankruptcy forms are national forms used in bankruptcy cases across the United States. While the clerk’s office may not be able to provide you with the official forms, you can each one of them, for free, as a fillable PDF. Additionally, each one of the bankruptcy districts in the Empire State has created certain local forms for use in cases filed within each district. These New York bankruptcy forms are available for download on the individual web pages for the four districts.
The Chapter 7 Discharge
A discharge releases individual debtors from personal liability for most debts and prevents the creditors owed those debts from taking any collection actions against the debtor. Because a chapter 7 discharge is subject to many exceptions, debtors should consult competent legal counsel before filing to discuss the scope of the discharge. Generally, excluding cases that are dismissed or converted, individual debtors receive a discharge in more than 99 percent of chapter 7 cases. In most cases, unless a party in interest files a complaint objecting to the discharge or a motion to extend the time to object, the bankruptcy court will issue a discharge order relatively early in the case generally, 60 to 90 days after the date first set for the meeting of creditors. Fed. R. Bankr. P. 4004.
The grounds for denying an individual debtor a discharge in a chapter 7 case are narrow and are construed against the moving party. Among other reasons, the court may deny the debtor a discharge if it finds that the debtor: failed to keep or produce adequate books or financial records failed to explain satisfactorily any loss of assets committed a bankruptcy crime such as perjury failed to obey a lawful order of the bankruptcy court fraudulently transferred, concealed, or destroyed property that would have become property of the estate or failed to complete an approved instructional course concerning financial management. 11 U.S.C. § 727 Fed. R. Bankr. P. 4005.
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Automobiles Trucks And Motorcycles
The bankruptcy code currently protects up to $4,000 of equity in a motor vehicle per individual person filing bankruptcy. When you file Chapter 7 bankruptcy yourself, this can be confusing.
The exemption cannot be split up among several vehicles and can only be applied to one vehicle. If the vehicle is owned jointly, then the bankruptcy code presumes that each listed owner has a 50% interest in the vehicle. Properly applying the exemptions is critical to protecting your property. If you dont get this right, the trustee could ask you for the keys!
Remember, the exemption applies, of course, only to equity. If your car is worth $10,000 and you owe 10,000 or more on it, there is no equity. However, if you owe $10,000 on a $20,000 car, then you have $10,000 equity. Since your exemption is only $4,000 the car would have equity available to the trustee to take and sell. The trustee would sell the car for $20,000, pay the loan of $10,000, pay you $4,000, and then have $6,000 to apply to your debt.
These are just the highlights of the personal property issues that arise in bankruptcy. The official form lists over 20 separate categories of property that must be disclosed as well as a catchall provision for any other property not listed in a category.
Form 106 Schedules DE and F
These schedules contain a list of all of the creditors that you have the time or cases filed.
Schedule D
Schedule E
Is where you are required to list priority creditors, typically tax creditors
Schedule F
Learn About How To Self File For Chapter 7 Bankruptcy
Do you need to learn how to self file for chapter 7 bankruptcy in Utah? It may come to a surprise for many but self filing for Chapter 7 bankruptcy is not only possible, but fairly common. And while it is a time consuming process, it doesnt require extensive legal knowledge or argument. On the contrary. Declaring bankruptcy isnt so much a question of legal acumen, but claimable debt.
But that doesnt mean its as simple as automatically filing paperwork. Youre still going to need to conduct your own research. Youre still going to need to distinguish what property is exempt from bankruptcy and what is not. And these are frequently areas when having an attorney can come in quite handy.
But it can be costly. Its been estimated that US bankruptcy attorney fees can run in excess of $5,000. And in Utah, it can be even more expensive as a result of both our homestead exemption laws as well as state statutes on nonexempt property.
With that in mind, theres many homeowners who could benefit from the advice of a qualified bankruptcy attorney. Their cases can be complicated as a result of existing liens, divorce proceedings, non-Utah property and previous bankruptcy filings. But for others who have both the time, patience and less complex circumstances, heres what you need to know about self filing for bankruptcy in Utah.
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How To File For Chapter 7 Bankruptcy: A Step
Richie Bernardo, Senior WriterMar 24, 2015
Filing for Chapter 7 bankruptcy can be a daunting process for those who are going through it for the first and hopefully last time. But with adequate preparation and the proper guidance of a bankruptcy attorney, you can rest assured that the process will go without unexpected surprises.
Generally, the entire Chapter 7 process from filing to discharge will last between three and six months. It is a much swifter affair compared to the three- to five-year timeline of Chapter 13 bankruptcy, in which debtors reorganize their debts. In a typical Chapter 7 case, you will make only one trip to the bankruptcy court, during which youll attest to the truthfulness and accuracy of your bankruptcy petition. The case will end shortly after you receive your discharge, and all your qualifying debts will be wiped out.
Below, we provide an instructive guide on the filing process as well as tips to help you achieve discharge.
Filing Bankruptcy Without A Lawyer Using Upsolve
Upsolve is a digital legal aid nonprofit for low-income individuals who canât afford to pay a bankruptcy lawyer for their simple Chapter 7 bankruptcy case. Upsolve is not a bankruptcy petition preparer. We provide you with an online web app to simplify the process of preparing your own bankruptcy forms for free.
Upsolve is funded by the federal government , and leading philanthropists like Eric Schmidt, former CEO of Google. Hereâs how it works.
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Debts That Can And Cant Be Discharged In Chapter 7 Bankruptcy
Chapter 7 should dismiss most of the debts you owe, but there are some hard-and-fast debts that cant be discharged in Chapter 7.
The list of non-dischargeable debts includes:
- Child support
- Student loans must prove undue hardship
- HOA fees if you surrender your home or condo
- Any other form of unsecured debt.
Collect Your New York Bankruptcy Documents
The first step in preparing to file is to collect your bankruptcy documents. These are the documents youâll need to fill out your bankruptcy petition. To make sure that you properly schedule all of your debts, get a copy of your credit report from each one of the three credit bureaus. Youâre entitled to a free copy of your report from each one of them every year. Additionally, you should also collect all collection notices and letters youâve received in the last 90 days from debt collectors and collection agencies as some of them may not yet appear on your credit report.
Youâll also need your two most recent income tax returns as filed with the IRS and each paycheck stub you received in the last 6 months. Since your bank statements will prove useful in creating your budget for your life after filing Chapter 7 in New York, you should collect at least the two most recent ones for each one of your accounts.
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Reasons Not To File For Bankruptcy
Here are some reasons bankruptcy might not be a good idea for you:
- Bankruptcy stays on your credit rating for 7 to 10 years
- Getting credit may be harder or more expensive
- It can cause strain in relationships with some creditors and cosigners
- You may have to return property that is not paid for
- You can only get a Chapter 7 discharge once in eight years and
- You may be able to protect your income and property without filing bankruptcy.
Also, the following types of debt will remain even after a bankruptcy:
- Unpaid child support payments
- Unpaid maintenance or alimony payments
- Unpaid fines
- Most unpaid state and federal taxes
- Criminal restitution orders
- Debts due to fraud, theft or embezzlement
- Damages to another person caused by drunk driving or something done on purpose
- Debts from a property settlement in a divorce
Finally, here is a list of things bankruptcy cannot do for you:
- Get rid of a security interest, such as a mortgage or security in a car
- Stop an eviction, if the eviction court already entered an Eviction Order before the bankruptcy was filed
- Protect cosigners, unless they also file bankruptcy
- Release you from credit card debts that happened right before the bankruptcy was filed
- Discharge debts that are incurred after the bankruptcy is filed
- Discharge debts the court decides you can afford to pay if you have enough income
- Allow you to keep valuable property, such as a vacation home, an RV or expensive jewelry
