Hopefully you have read our prior blog titled “How Filing Chapter 7 can Improve your Financial Life” to learn the benefits of Chapter 7 cases. This blog will discuss the Chapter 13 process and how a plan of reorganization can benefit you. When you file for bankruptcy protection under Chapter 13, you must have a routine source of income to fund your plan of repayment. Your Chapter 13 plan will outline how you intend to repay your creditors all or a percentage (0-100%) of what is owed to them. The law requires your Chapter 13 plan to last a minimum of three years and a maximum of five years. Finally, you will be required to make monthly payments to the Chapter 13 trustee who will distribute the payments to your creditors as set forth in the plan. Drafting a Chapter 13 plan can be confusing, so it is wise to seek the assistance of an experienced bankruptcy attorney. Each type of debt you owe falls…Read More
If you are planning to file for bankruptcy protection, one of the first decisions you must make is what type of case you want to file and whether you qualify to file it. The two most common types of personal bankruptcy cases are Chapter 7 and Chapter 13. You may only be eligible to file one type of bankruptcy. This blog will discuss the advantages of filing a Chapter 7 case. To learn more about filing a Chapter 13, please read our next blog titled “You Need a Plan for your Chapter 13 Filing.” The Chapter 7 bankruptcy process offers a debtor numerous benefits. Below are a few of the most common reasons why individuals struggling with debt file for debt relief under Chapter 7: Unsecured Debt Discharge If you are overwhelmed by unsecured debt such as your credit card or medical bills, Chapter 7 allows you to eliminate the majority (if not all) of your unsecured debt. For many debtors, this means canceling thousands…Read More
If you are a small business owner, it is likely that your personal finances are closely tied to your business’s finances. You have devoted your time, energy and money in the entity, so you are fully vested in it. As a result, when your company begins to struggle, you have financial troubles too. While every situation is unique and you should confer with an experienced Chapter 7 or Chapter 13 attorney to discuss your individual situation, this blog will provide general guidance for small business owners who are considering filing a personal bankruptcy. When you file a bankruptcy case, it is important to understand whether or not your business is a separate legal entity. A sole proprietorship is a business that is treated the same as the individual and all of its debts may be included in your bankruptcy. If your entity is a limited liability company, corporation, or other form of separate legal structure, the business debts cannot be included in your personal bankruptcy.…Read More
Most people have been told that it is important to create an estate plan and to avoid the probate process. Unfortunately, they don’t truly understand why it is important. As a result, it is common for individuals to postpone estate planning because they think “I’ll get to it,” or they incorrectly believe that the estate plan they have will circumvent the probate procedures. Probate is the process used by the courts of law to administer the estate of a deceased person. The probate court provides the means for all claims against the estate to be administered and the assets of the deceased person to be distributed according to the terms of the Will or as provided by law if no Will was left by the deceased individual. Below are the two primary reasons you should ensure that your estate plan will allow your estate to be administered outside of probate: Probate is time-consuming: As with most things that must go through the court process, a…Read More
If you are considering filing a Chapter 7 or Chapter 13, one of your main goals is to receive a discharge of your debt. When you receive your discharge order from the bankruptcy court, it means that you are no longer legally obligated to pay all of the debts included in the discharge. In most cases, the majority if not all of the debt included in your bankruptcy filing can be discharged. Thus, your discharged debt is cancelled! For many people, this saves them from repaying thousands of dollars to creditors and it is often referred to as a financial “fresh start.” When you file a personal bankruptcy, it is essential that you make a full financial disclosure in order to obtain the most comprehensive discharge available. The law requires a debtor to disclose all of his or her debts, creditors, sources of income and expenses. A list of every party that you owe money to is created and it is commonly referred to as…Read More
If you are drowning in student loan debt, you are not alone! Our country is facing an overwhelming amount of student loan debt. Most people are aware that it is difficult to discharge student loan debt in bankruptcy. It is important to understand that it may be difficult, but not impossible! According to Section 523(a)(8) of the Bankruptcy Code, a debtor must be able to prove an “undue hardship” on the debtor or his/her dependents will result from repaying the student loans. There is no clear definition of what constitutes an undue hardship, but the standard is strictly enforced by the bankruptcy courts. In general, an undue hardship means that it is not reasonable to expect the debtor to ever have the ability to repay the student loan debt. Most courts believe that there should be a certain level of hardship experienced by the debtor when repaying the debt. As a result, discharge of student loan debt usually only occurs in extreme cases. The good…Read More
When you are planning to file a Chapter 7 or Chapter 13 case, you are likely looking for every way possible to cut costs and save money. If you are considering representing yourself in your bankruptcy filing, please read our blog titled “Why you Need an Attorney to File Bankruptcy.” Filing any form of legal action (and particularly a bankruptcy case) without legal counsel can be overwhelming and costly. Another way people think they can save money is by using a bankruptcy petition preparer to file their case. As the name indicates, a petition preparer is somebody who assists you with drafting and filing your initial bankruptcy pleadings. They use all of the financial information you provide to them to prepare your petition. Once your bankruptcy petition has been drafted, however, you are on your own. A petition preparer is not an attorney. He or she cannot give you legal advice, which means many of your questions will go unanswered. A petition preparer cannot represent you in…Read More
Many clients come to our office hoping to discharge or eliminate a specific debt. While filing a personal bankruptcy can allow you to discharge the majority of your unsecured debt, there are certain types of debt that are non-dischargeable. One type of debt that is excluded by law from being eligible for discharge is one arising from the “death or personal injury caused by the debtor’s operation of a motor vehicle, vessel, or aircraft if such operation was unlawful because the debtor was intoxicated from using alcohol, a drug, or another substance.” 11 U.S.C. §523(a)(9). For example, if you were in a car accident and the court found you guilty of driving under the influence of drugs or alcohol (DUI) and you owe a debt to the victim in the crash, the debt cannot be discharged. Generally speaking, the law does not permit you to discharge awards of restitution, fines, or penalties that have been imposed by a court of law. Pursuant to Section 523 of…Read More
Most people who are struggling to make ends meet think they cannot afford to hire a bankruptcy attorney. However, if you are planning to file your Chapter 7 or Chapter 13 case pro se (without a lawyer), you should be aware that it may cost you more than you realize. Most individuals who represent themselves in a Chapter 7 or Chapter 13 filing quickly realize it is very difficult. Attorneys must attend years of school and receive training before they are allowed to represent you in court. The bankruptcy laws and rules of the court can be confusing. If you are not familiar with the applicable laws and rules, it is very easy to make costly mistakes. Although the Internet is full of “self-help” websites and there are a variety of do-it-yourself books, these types of sources are limited to providing you with general guidance. Nothing can replace a local attorney who has practiced before the judge or trustee handling your case and understands how to efficiently…Read More
If you are like millions of other people and Facbook, Instagram or Twitter are a part of your daily routine, it is important to understand how social media can impact your personal bankruptcy case. Social media is no longer being used solely be teenagers. Adults and businesses (including your creditors) use networking sites to learn details about others. Thus, if you are considering filing a Chapter 7 or Chapter 13 bankruptcy, you should carefully consider how your posts that could be read by the trustee or your creditors could cause damage in your filing. Below are a few examples of how your posts and pictures could negatively impact your ability to obtain relief from your debt in bankruptcy: All debtors are required under the law to make comprehensive financial disclosures. This includes submitting a list of everything you own. Thus, post a picture of the new motorcycle you just bought that was not listed in your bankruptcy pleadings can raise questions in your case. All…Read More