Posted on March 19, 2018 in Bankruptcy Procedure

Bankruptcy can go beyond giving you immediate and long-term relief from your debts. It comes with many other surprising benefits.

The next 12 blog posts will be about some of the most powerful and surprising benefits of bankruptcy.

You’re likely considering bankruptcy because you’re financially overwhelmed and need relief. You need immediate relief from debt collection pressures. You need long-term relief from having to pay debts you can’t handle. Bankruptcy provides that immediate and long-term relief.

But bankruptcy can often also give you some other rather amazing benefits, beyond the basic relief you expect. The next dozen weekly blog posts will give you details about the following benefits:

1. Get Back Money Recently Paid to a Creditor

Through “preference” law you could get back money you’ve recently paid to a creditor—paid either voluntarily or not.

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 Posted on March 12, 2018 in Chapter 13

Besides fulfilling the terms of your Chapter 13 payment plan, you may need to make other payments and meet other requirements.

The bankruptcy court’s approval of your payment plan (at the Confirmation Hearing) happens about 2-to-4 months after filing your case. At that point your Chapter 13 case is fully on its way. You likely have about 3 to 5 years altogether to finish the case. Having gotten to this crucial point, there are a few other crucial steps you need to fulfill to successfully finish your case.

Last time we got into three of these:

• Do your “debtor education”
• Avoid or defeat “nondischargeability complaints”
• Pay your Chapter 13 plan payments

Today we lay out two other crucial steps.

Pay Any Obligations NOT Within Your Plan Payment

In many Chapter 13 cases you pay nothing to your creditors except the single plan payment each month. The trustee divides that payment among your creditors as laid out in your court-approved plan. You pay nothing else to any creditor.

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 Posted on March 02, 2018 in Automatic Stay

The automatic stay immediately stops most collection actions when you file bankruptcy. But it doesn’t stop a "criminal action or proceeding."

The Automatic Stay

This protection against debt collection is crucial because it gives you a necessary financial break. It’s effective because it is so fast and broad in its coverage.

It’s fast because the protection goes into effect simply by your act of filing bankruptcy. It becomes binding on your creditors without any further action by the bankruptcy court.

It’s broad because almost all debts are covered. They’re generally covered even if the debt can’t be discharged—written off—in bankruptcy. For example, if you owe a very recent income tax debt, it can’t be discharged. And yet the automatic stay immediately stops the IRS and state tax collector just like any other creditors.

But while the automatic stay is broad there are some specific kinds of debts it does not protect you from. And because the automatic stay is such a crucial benefit to a person filing bankruptcy, it’s very important to know these exceptions. You need to know which debts a creditor CAN continue to collect in spite of your bankruptcy filing.

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 Posted on February 28, 2018 in Automatic Stay

To be able to keep your property that’s collateral or security on a secured debt, you must give that secured creditor “adequate protection.”

In the bankruptcy system, debtors and creditors each get certain protections.

“Automatic Stay” Protection for You

A major protection that you as a debtor filing bankruptcy get is the “automatic stay.” That’s the part of bankruptcy law which stops creditors’ collection actions against you. That includes stopping a secured creditor from repossessing or foreclosing its collateral or its security. (See Section 362(a) of the U.S. Bankruptcy Code.)

The automatic stay protection goes into effect immediately upon your filing of bankruptcy. But it doesn’t necessarily keep the collateral protected for the long term. The creditor can challenge that protection.

“Adequate Protection” Protection for Secured Creditors

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 Posted on February 26, 2018 in Automatic Stay

A creditor might file a motion to avoid violating the stay, or to get permission to take some action other than collect a debt.

In the last three blog posts we’ve covered five reasons why creditors ask for “relief from the automatic stay.” The first one is by far is the most common. Creditors ask for “relief from stay” to take back collateral, or to establish payment and other terms that you must meet to avoid losing the collateral.

The other four reasons were to get permission to finish a lawsuit or other proceeding to determine:

1. whether you owe any debt to the creditor

1. the amount of that debt, assuming you owe something
2. whether you owe a debt which can be paid by insurance (instead of you personally)
3. whether the debt you owe can be discharged (written off) in bankruptcy

Today we cover two more reasons that a creditor may ask the bankruptcy court for “relief from stay.” These tend to be precautionary—arguably the creditor or other party could act without bankruptcy court permission. But because of the risks of potentially violating the automatic stay the party first asks for permission.

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 Posted on February 23, 2018 in Discharge of Debts

A creditor might want to pay a claim through your insurance, or finish a lawsuit to establish that you got the debt through fraud.

“Relief from the Automatic Stay”

Our last blog post got into some reasons that creditors ask for “relief from stay” other than to repossess collateral.

The “automatic stay” is one of the biggest benefits you get for filing bankruptcy. It “stays”—legally stops—virtually all creditor collection actions right away when you file a bankruptcy case. The automatic stay protects you, your assets, and your income from creditors. It does so permanently in many circumstances.

But there are exceptions, when creditors can ask for permission to pursue a debt, and may get that permission. So it’s important to know the circumstances in which a creditor would be able to get “relief from stay.”

Last time we explained two of those circumstances, allowing a creditor to finish a legal proceeding against you to determine whether you are liable on a debt, and if so how much you owe. Now here are two other circumstances where creditors may get “relief from stay.”

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 Posted on February 21, 2018 in Automatic Stay

A creditor may ask the bankruptcy court to let another court finish a lawsuit about liability and/or the amount of damages.

“Relief from the Automatic Stay”

Our last blog post was about the possibility of a creditor asking for “relief from the automatic stay.” The automatic stay refers to the immediate protection you receive from debt collection as soon as you file bankruptcy. (See Section 362 of the U.S. Bankruptcy Code about the “Automatic stay.”)

So, a creditor’s motion for “relief” from that protection refers to a creditor’s request to the bankruptcy court for permission to pursue a debt in spite of your bankruptcy filing. In certain circumstances a creditor may have legal grounds to ask for an exception to the automatic stay protection. (See Section 362(d) of the Bankruptcy Code about “relief from the stay.”)

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 Posted on February 19, 2018 in Automatic Stay

Filing bankruptcy stops creditors’ collections against you immediately. But sometimes a creditor tries to get permission to collect anyway.

In our last 10 blog posts we’ve been talking about the “automatic stay.” It is one of the most important and immediate benefits of bankruptcy. The automatic stay stops most kinds of creditor attempts to collect their debts against you, your income, and your assets.

We’ve been looking at the relatively few special situations where the automatic stay protection does not apply. (Examples have included certain family court debts and proceedings, and some tax procedures.)

Today we focus in on how creditors can react to bankruptcy’s automatic stay. Creditors can sometimes challenge whether the automatic stay remains in effect or not, or whether conditions apply to its protection.

Creditor Challenges to the Automatic Stay

When you think of “relief” in bankruptcy what comes to mind is relief from your creditors. At the heart of the bankruptcy petition are the words, “I request relief.” (See page 6 just above the signature line of Official Form 101.)

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 Posted on February 16, 2018 in Income Taxes

Filing bankruptcy stops tax collection just like it stops other debt collection by more conventional creditors. But there are exceptions.

The last several weeks of blog posts have been about bankruptcy’s “automatic stay” protection from creditor collections. We’ve also gotten into many of the exceptions to that protection—when certain creditors CAN take certain actions.

Today we focus on some very limited exceptions to the automatic stay protection, those which apply specifically to income taxes. In bankruptcy you don’t want surprises, especially from a tax collector. These limited exceptions are reasonable. But it’ll still help you to understand them in order to not be surprised by them.

Tax Determination is Allowed, Tax Collection is Not

Simply put, the exceptions to the automatic stay protections are about determining the amount of tax owed. The IRS and the state tax authorities can take steps during bankruptcy to figure out how much you owe. They can make you do what the law requires along these lines. For example, they can require you to file your tax returns, regardless that you’ve filed bankruptcy. But then they can’t take any action beyond that to collect any taxes owed.

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 Posted on February 14, 2018 in Automatic Stay

A landlord can take possession of a rental fast if you're endangering the rental property or illegally using a controlled substance there. [

Bankruptcy Stopping Eviction

Two blog posts ago we got into how bankruptcy can stop a residential eviction. Basically, you can stop an eviction if you file a bankruptcy case before the landlord gets a judgment of possession. That’s a court’s decision that the landlord has the right to take possession of your rental. That means you no longer have a property right that bankruptcy law can protect. So after this judgment, the eviction can go forward (except under some unusual circumstances discussed in that earlier blog post).

Special Reasons to Evict

However, there’s a way for a landlord to quickly evict you even if you do file bankruptcy before the judgment of possession. The landlord could accuse you of one of two kinds of bad behavior:

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