If you have more than one mortgage loan on your home and you are struggling to pay your bills, it is time to consider obtaining relief from your debt by filing a personal bankruptcy case. A significant benefit of filing a Chapter 13 case is a procedure commonly referred to as “lien stripping.” It allows a debtor with multiple mortgages and a home that is “underwater” to treat inferior mortgage liens as unsecured debt. The Following Is An Example Illustrating How Lien Stripping Works: John owns a house that is worth $200,000. John owes $225,000 on his first mortgage and $25,000 0n his second mortgage. Although John has a steady job, he cannot afford to pay both mortgages in addition to all of his other bills. John decides to file a Chapter 13 case and argue that his second mortgage should be treated as unsecured debt in his Chapter 13 repayment plan because there is no equity in his home to support the second mortgage…Read More
One of the most powerful tools a debtor obtains by filing for bankruptcy protection is the automatic stay. The stay goes into effect as soon as you file your bankruptcy petition and it prohibits creditors from taking any further collection actions against you while your case is pending. Thus, the stay can be very helpful when you are facing a financial emergency such as: Foreclosure: If your home is going through foreclosure, filing a Chapter 7 or Chapter 13 can temporarily halt it. Depending on your financial situation, you can use this time to negotiate with your mortgage lender or it at least allows you to remain in your home for a few additional months. In a Chapter 13 filing, you can catch-up your delinquent mortgage payments through your repayment plan. Eviction: If you rent your home and your landlord is threatening to evict you, filing a bankruptcy can help. However, it is important to understand that you must file your bankruptcy case before your…Read More
Most individuals who file for bankruptcy do so under Chapter 7 or Chapter 13. While both types offer you comprehensive relief from your debt, they each have advantages and disadvantages. Thus, it is important to confer with a knowledgeable bankruptcy attorney to determine which type of filing is right for you. In fact, a lawyer can review your unique financial situation and help you understand what type of bankruptcy you qualify for and how it will impact your life. Chapter 7 In order to file for Chapter 7 protection, you must pass the means test. The “test” is actually a mathematical formula that the bankruptcy court uses to determine whether an individual is abusing the system in an attempt to discharge debt that he or she can afford to pay. We will discuss the means test in future blogs, so please check back or contact our office to schedule an appointment. The greatest advantage of filing a Chapter 7 is your ability to discharge or…Read More
If you are parents of minor children, one of the most important decisions you can make is who to appoint as the guardian of your children if you both should die or become incapacitated. It is natural for parents to struggle (and therefore postpone) with this very difficult decision. No parent wants to think about somebody else raising their children. To make matters worse, the individual that may be best for raising your children may not be the wisest choice for managing their finances for them. Most parents include the appointment of a guardian for their children as part of their estate plan. A guardian is the individual who will have physical custody of your kids and raise them until they are adults. If your estate plan includes a trust, you will also need to name a guardian (also called a trustee) of the assets you leave to your children. The person you name to be the guardian of your children and the person you…Read More