What To Know Before Filing For Bankruptcy
As a fallout of your bankruptcy filing, your for a 10-year period if it is a Chapter 7 bankruptcy, and a seven-year period for a Chapter 13 bankruptcy.
Even though you are not legally required to hire a lawyer to handle your bankruptcy, it may be in your best interest to do so. You may even be able to find free legal services.
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Find Out How To Keep Your Car Under Chapter 7 Or Chapter 13 Bankruptcy
Filing for bankruptcy doesn’t mean that you’ll have to give up your car. But it’s not a given that you’ll be able to keep it either. Being able to retain your vehicle in bankruptcy depends on the amount of equity, whether you can continue paying the loan , and the bankruptcy chapter that you choose to file.
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Do The Courts Ever Deny A Chapter 7 Bankruptcy
It can happen. Most individual debtors receive a discharge under Chapter 7.
However, if the courts find that an individual concealed money or other assets, fraudulently transferred assets that should have been used to pay off debts, or otherwise broke the law, the entire bankruptcy case may be denied.
What You Can Lose In Bankruptcy Part One
By | Submitted On August 01, 2009
Bankruptcy offers a way out for those who don’t have any other means of solving their financial troubles. To those who are smart enough to plan ahead and plot out their road to recovery, bankruptcy can be a financial rebirth. But let’s face it — not everything about bankruptcy is great, and there are certain consequences you’ll likely have to deal with for a while.
There are actually two ways out of financial trouble — Chapter 7 and Chapter 13 bankruptcy. You’ll need to know the advantages and disadvantages of bankruptcy to go into things with both eyes open.
First of all, remember that you stand to lose your assets.
When it comes to Chapter 7 bankruptcy, you’ll be forced to liquidate all your non-exempted assets to pay your debts and bills. The thing is that those who apply to Chapter 7 don’t have many assets to begin with. If that sounds like you, then you may not have to give up most of what assets you do have left.
But be careful — you may also stand to lose your home after you file for bankruptcy, or at least lose most of its value.
Homestead exemptions vary from state to state, so it’s always a good idea to discuss this issue closely with your bankruptcy attorney. This is important if you don’t want to lose your house just by filing bankruptcy.
Secondly, remember that bankruptcy is a black mark on your public record.
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Paying For Nonexempt Property In Chapter 13
A Chapter 13 trustee won’t sell your property, even if you’d like the trustee to do so. You’ll keep all of it. As good as this might sound, it can get expensive. You must pay the value of your nonexempt property through your repayment plan.
If you can’t afford the paymentand many people can’t because nonexempt equity can drive up a monthly payment fastyou won’t qualify for Chapter 13. Keep good records if you try to get around this problem by selling assets before filing for bankruptcy. You can always sell property and use the funds for your expenses, but you should plan to turn over any remaining amount to the trustee.
What Is The Value Of Your Car
Under Minnesota bankruptcy laws, debtors can protect up to $4,600 of equity in a single vehicle. Equity is determined by subtracting the amount of any loan from the blue book value of your car. If there is $4,600 or less after you run the numbers, your car will be classified as exempt, meaning the bankruptcy trustee cant touch it. Even in the event equity exceeds $4,600, it is likely that your bankruptcy attorney can make a deal with the trustee to buy-out the non-exempt value of your car with a cash payment. Trustees dont really want to sell your stuff they are often willing to entertain settlement offers.
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Guns In Bankruptcy Are An Asset
Guns in bankruptcy dont present a particular problem, but are a wrangle guns are an asset like any other. As a rule of thumb, bankruptcy trustees are not interested in assets that are worth lesscumulativelythan $1000.00. However, a bankruptcy attorney would do a standard asset analysis and ask the following questions.
When Should I File Bankruptcy For Medical Bills
Thatâs another hard question. Filing bankruptcy is not right for everyone or every situation. Some factors to consider are:
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The amount of medical debt: Can you pay it off in a year with monthly payments?
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Your total debt: Are you juggling multiple debt repayments every month?
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The amount of money you earn: What type of bankruptcy can you file?
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The exemptions you can claim to protect your property: Would you lose any property by filing bankruptcy?
A free credit counseling session can help you figure out whether bankruptcy is the best debt relief option for you.
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How Can Our North Carolina Bankruptcy Lawyers Help You
At the Sasser Law Firm, we are committed to helping individuals and families get a fresh start financially. We pride ourselves on being honest and open about what we think would be best for you, especially if we think there are ways you could avoid bankruptcy.
Since our firms founding, we have handled more than 8,500 bankruptcy cases, and we have extensive experience in both emergency and complex cases. Schedule a free consultation with our team today to talk about your case.
When you choose the Sasser Law Firm, you will work directly with a board-certified attorney, not a paralegal or a legal assistant. Our North Carolina bankruptcy law firm serves clients throughout the state, including in Wake, Harnett, Johnston, Durham, Orange, Granville, Vance, Franklin, Warren, Nash, Lee, Chatham, and Moore counties.
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.
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Exempt Assets What Cannot Be Liquidated
Debtors who file for Chapter 7 bankruptcy are allowed, by law, to keep a limited amount of property, possessions and income. These allowances are known as exemptions. State and federal bankruptcy exemptions protect your property from creditors, from liquidation by the trustee and help you rebuildWhen filing for bankruptcy in Ohio, the debtor can keep a limited amount of property, possessions and income. The most common is called the homestead exemption, which allows a debtor to retain his or her primary residence. In Ohio, this currently applies up to an equity value of $136,925.
According to the state, exempt assets include:
- The main residence of the person declaring bankruptcy, up to $136,925 of equity,
- As much as $3,775 in value for one vehicle,
- As much as $12,625 of household items and furniture and jewelry,
- As much as $1,600 in value of jewelry,
- Public assistance, pension or a portion of your regular wages.
See a more detailed list of the property exemptions in Ohio bankruptcies.
Determining What Will Happen To Your Car
Each chapter offers different benefits. Once you understand that you’ll have to pay for any car that you’d like to keep and you know how much equity you can protect, you’ll be ready to decide which bankruptcy option is best for you.
For instance, Chapter 7 bankruptcy is an excellent choice for those who can protect all equity and are current on payments. Chapter 13 bankruptcy works well if you’re behind on payments or you have a significant amount of nonexempt equity and would still like to keep the car.
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Cell Phones In Chapter 13 Bankruptcy
A debtor can keep all nonexempt property in Chapter 13 bankruptcy as long as the debtor pays its value through the three- to five-year Chapter 13 repayment plan.
Although cell phones can be a high-dollar item when purchasedeven more expensive than many computerslike a new car, they lose much of their value once they’re out of the box. So it’s unlikely that a Chapter 7 trustee would have any interest in attempting to liquidate a used cell phonebut you never know. So you must list cell phones, just like any other asset, in the schedules.
Get Help From Our Waco Tx Chapter 7 Bankruptcy Lawyers Today
Are you ready to take the next step? We can help. At the Law Office of Simer and Tetens, our skilled Texas bankruptcy lawyers have extensive experience handling no asset Chapter 7 bankruptcy cases.
No matter your financial circumstances, we are committed to helping you find a sustainable solution. To schedule a FREE, no-obligation consultation, please do not hesitate to contact us today.
With an office in Waco, we represent clients in McLennan County and throughout Central Texas.
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What To Do After Chapter 7 Bankruptcy
Push the re-start button on your financial life.
Thats the first thing anyone should do after having debts discharged in Chapter 7 bankruptcy. Hopefully, that re-start button includes a plan for reduced spending and paying all bills on time.
The easiest way to do that is to draw up a budget that realistically accounts for your income and expenses.
If youre not good at that, call a nonprofit credit counseling agency and get some free assistance from their professional certified counselors. Helping consumers come up with an affordable monthly budget is their specialty.
They can give you the benefit of their training and experience at drawing up monthly budgets, plus tips on how to make the bottom line come out in your favor every month.
If you get in the habit of paying bills on time, you will begin to , and youll regain favor with lenders and credit card companies. A few years of good practice and you and your creditors will forget this ever happened.
Can I Erase My Student Loans By Filing Bankruptcy
Generally, student loans are not discharged in bankruptcy. In 11 U.S.C. sec. 523 there are two exceptions to this general rule:
Student loans more than 7 years old used to be dischargeable under certain circumstances, but this provision was removed by an appropriations bill passed in October of 1998.
Whether an exception applies depends on the facts of the particular case and may also depend on local court decisions. Even if a student loan falls into one of the two exceptions, discharge of the loan may not be automatic. You may have to file an adversary proceeding in the bankruptcy court to obtain a court order declaring the debt discharged.
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Where Are The Minnesota Bankruptcy Courts Located
Minnesota bankruptcies are filed with the District of Minnesota, United States Bankruptcy Court. There are four court locations where you may present your bankruptcy case for filing. Your section 341 meeting of creditors could be in various locations.
St. Paul: 200 Warren E. Burger Federal Building and United States Courthouse, 316 N. Robert St., St. Paul, MN 55101,
Minneapolis: 301 U.S. Courthouse, 300 S. Fourth St., Minneapolis, MN 55415,
Duluth: 404 Gerald W. Heaney Federal Building and United States Courthouse and Customhouse, 515 W. First St., Duluth, MN 55802,
Fergus Falls: 204 Edward J. Devitt United States Courthouse and Federal Building, 118 S. Mill St., Fergus Falls, MN 56537
Where To Find Your State’s Bankruptcy Exemptions
Your state’s bankruptcy exemptions are in your state code. If you’re not sure where to find your state’s statutes, we can help. We provide state exemption lists in Bankruptcy ExemptionsWhat Do I Keep When I File for Bankruptcy? Scroll down to the middle of the article for state links.
But remember, mistakes can be costly. You must read the code section itself to be sure it applies.
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Losing Your Home In Bankruptcy V Losing Your Home In Foreclosure
You’ll want to be able to distinguish between losing your home in bankruptcy and losing your home outside of bankruptcy . These are two separate processes.
If you’re behind on your mortgage payments, you’ll eventually lose your home in foreclosure outside of bankruptcy, even if the bankruptcy trustee doesn’t sell your home.
Should I File For Chapter 7 Bankruptcy
- Read this in:
Learn about the pros and cons of filing for bankruptcy and what types of debts you can discharge. #0103EN
- Contents
What is bankruptcy?
It is a legal process to help people who are unable to pay their outstanding debts.
How are Chapter 7 and Chapter 13 bankruptcies different?
Chapter 7: the court cancels your debt. Your bills vanish. You are no longer responsible for them. You get a clean slate and a chance to start over with no debt.
Chapter 13: the court puts you on a 3- to 5-year payment plan to repay your debts. This can help you try to avoid foreclosure of your home or to pay off other debts, such as traffic tickets or legal financial obligations , that you cannot discharge.
My wages are being garnished. Can a bankruptcy help?
Probably. The day you file for bankruptcy, the court issues a stay. This means all collection action, including garnishment, must stop immediately.
Which bills can I discharge in a Chapter 7?
You can discharge most bills, including credit card debt, hospital and medical debt, debt owed to a former landlord, and debt owed due to the repossession of a vehicle.
You cannot discharge:
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Traffic tickets and fines . Read My Drivers License was Suspended. Can I Get it Back? to learn more.
When should I think about Chapter 7 bankruptcy?
You can only file for bankruptcy once every 8 years. Before filing for Chapter 7, at least 1 of these should be true:
If you are a homeowner:
When do I not need bankruptcy?
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Can You Protect Your Home Equity With Bankruptcy Exemptions
State exemption statutes list the property its residents can protect in bankruptcy. Some states allow residents to choose between either the state exemption list or the federal bankruptcy exemption scheme. Either way, almost all states allow residents to protect some home equity with a homestead exemption. You might be able to exempt even more with a wildcard exemption.
If your exemptions adequately cover your equity, the trustee won’t sell your home in a Chapter 7 bankruptcy. However, if your exemptions protect only a portion of it, the trustee will sell the house, pay off the mortgage, give you the amount you’re entitled to exempt, and use the remainder of the sales proceeds to pay creditors.
Keep in mind that the trustee will take into account the costs to sell the home. If, after deducting sales costs, the amount remaining isn’t enough to make a meaningful payment to creditors, the trustee will abandon the property .
How Many Bankruptcies Are Due To Medical Bills
This is a difficult question to answer because there are different ways medical bills can lead a person to file bankruptcy:
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cases where hospital bills make up most of the debt
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cases where the cost of medical care and lack of insurance coverage caused the filer to use credit cards to pay for other expenses
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cases where the filer used credit cards to pay for medical expenses not covered by their health insurance
In 2005, then-Harvard professor Elizabeth Warren published a paper concluding that more than 40% of personal bankruptcies are due to medical debt. This number was updated to more than 60% in 2009.
From experience, we can tell you that almost all low-income Americans who file bankruptcy have some sort of medical debt. Hereâs just a small sampling on questions related to medical debts from our Facebook Community.
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