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Recent Blog Posts
Making Sense of Bankruptcy: 5 Powerful Ways Chapter 13 Saves Your Home
Chapter 13 “adjustment of debts” provides a set of tools, each one solving a different problem that could otherwise lead to losing your home.
Here’s a summary of today’s blog post:
These 5 tools include: 1) being able to catch up on your mortgage arrearage flexibly, 2) “striping” your second (or third) mortgage off your home title, 3) preventing the recording of income tax liens on your home, 4) satisfying already recorded tax liens inexpensively and safely, and 5) slashing other debt obligations so that you can afford to pay debts on your home.
1. Catch up on Past Due Mortgage Payments
You have the length of your Chapter 13 payment plan—generally 3 to 5 years—to pay your missed mortgage payments.
Not only do you have this length of time—much longer than most mortgage lenders would allow voluntarily—you also have a great deal of flexibility in how and when it’s paid during that time. For example, depending on the amount of equity in your home and other factors, you may be able to pay other even more urgent creditors ahead of or at the same time as you’re catching up on the mortgage, such as vehicle and child/spousal support arrearages. You may even be able to catch up through a refinancing, perhaps even after waiting a couple years for more equity to build up in your home.
Making Sense of Bankruptcy: Using State Property Exemptions in Federal Bankruptcy
The U.S. Constitution makes bankruptcy a federal procedure. So why is the amount of assets you can protect different in each state?
The sentence we’re explaining today is:
The Constitution gives Congress power to make “uniform Laws” on bankruptcy, yet for much of our history it has had trouble doing so in part because of competition between states’ vs. federal powers, which eventually resulted in a compromise allowing each state to require debtors filing bankruptcy to use that state’s set of property exemptions instead of the federal one.
The Power to “Establish... Uniform Laws on the Subject of Bankruptcies”
From the beginning, and without change throughout our history, the U.S. Constitution has said that Congress has the power “to establish… uniform Laws on the subject of Bankruptcies throughout the United States.” Article 1, Section 8, Clause 4. The reason this was put into the Constitution was that the Framers wanted to economically unify the states, and for each state to have its own bankruptcy laws and procedures would instead cause conflicts among states and their residents.
Qualifying for Chapter 13
Chapter 13 “adjustment of debts” gives you extraordinary advantages over creditors, especially over certain kinds of creditors. Here's the sentence we're exploring today:You can file a Chapter 13 case if 1) you are “an individual,” 2) you have “regular income,” and 3) the amount of your debts does not exceed the legal limits.
Chapter 13 Filing a Chapter 13 case gives you extraordinary power over particular kinds of creditors. Here’s a sampling of what it can do:- You may qualify for a vehicle loan cramdown, enabling you to significantly lower your monthly vehicle loan payments, avoid having to catch up on any late payments, and greatly reduce how much you pay before the vehicle is yours free and clear.
- You can catch up on back child and spousal support as your budget allows, without your ex-spouse or support enforcement being allowed to garnish wages and accounts or to suspend your driver’s or occupational licenses.
The Truth about Qualifying to File a Chapter 7 Case
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Pay off Debt and Boost Your Credit with the “One-Two Payment Plan”
Despite the ominous headlines about the national debt, the percentage of American households that have debt has actually decreased in the last decade, according to the National Census. Still, millions of Americans file for bankruptcy each year due to medical bills, lost employment, and other factors.
If you are facing insurmountable debt, then bankruptcy may be a viable option. There are also alternatives to bankruptcy that can help you manage payments and inch toward financial security. This article will discuss one such method, known as the “one-two payment plan.”
Break Down and Prioritize Your Debt
You might be familiar with the phrase “prioritize your debt,” but this can be a somewhat nebulous piece of advice without a thorough understanding of your current financial state. By carefully examining all of your debts and taking note of balances, interest rates, and payment histories, you will be able to identify which debts to pay first. These are usually the ones with the highest interest rates.
Questions to Ask Yourself before Filing for Bankruptcy
Americans make financial decisions every day of their lives, such as where to purchase food and how to save money on basic living expenses. However, few choices have implications that can match the seriousness of filing for bankruptcy.
Choosing to file for bankruptcy is a critical decision, but for millions of debtors, it is the first step toward financial stability. Although an attorney is the best source for guidance in this matter, here are three questions that can help you decide if bankruptcy is a smart option:
What Is My Current Financial Situation?
Your financial situation, which involves your asset value and income, can affect your eligibility for bankruptcy. If your income is too low, then you may not qualify for chapter 13 bankruptcy. If you file for chapter 7, then there is a chance that you would have to sell assets to pay creditors. These are important considerations before you decide to file.
Strategies to Avoid Credit Card Debt
Credit can be a helpful tool when a person faces unexpected financial hardship, but it is also a major contributor to many Americans’ debts. The convenience of credit and bonus offers from credit card companies motivate many consumers to spend out of their budget.
By understanding how to manage credit cards responsibly, it is possible to avoid the stress and uncertainty that come with insurmountable debt. Read on to learn three strategies to avoid credit card debt.
Keep Diligent Records of What You Spend
Online shopping has made it particularly easy to overindulge with credit cards. People can spend thousands with the click of a few buttons.
According to the Federal Trade Commission, one of the best ways to avoid serious debt from online spending with credit is to keep a record of purchases. This will help you understand how much credit spending is affecting your finances.
Debt Dilemmas: Common Concerns about Chapter 13 Bankruptcy Process
There are many options available to Americans who want to resolve their debts, but for those who wish to avoid a mass liquidation of assets, chapter 13 bankruptcy may be the answer. If you are struggling with insurmountable debt, you likely have many questions and concerns about the chapter 13 bankruptcy process.
An experienced bankruptcy attorney can evaluate your situation, address your concerns, and provide recommendations for debt relief. In the meantime, here are three common questions about chapter 13 bankruptcy:
Will I Lose My Property?
Many first-time bankruptcy filers confuse chapter 7 and chapter 13 bankruptcies. Unlike chapter 13, chapter 7 bankruptcy involves liquidating assets to pay creditors. However, chapter 13 filers can keep their assets and instead pay debts through a structured repayment plan, according to Uscourts.gov.
Benefits of Hiring a Bankruptcy Attorney
For many Americans, bankruptcy offers a path to a debt-free life and freedom from the harassment of debt-collection agencies. However, the process of filing for bankruptcy is more intricate than most people assume.
Even if you know that you qualify for bankruptcy, the guidance of an experienced bankruptcy attorney may prove invaluable. Here are four reasons why:
1. An attorney can help you determine if filing for bankruptcy is a smart decision.
As Uscourts.gov highlights, a bankruptcy lawyer can assess your situation and help you determine if filing is a smart decision. There may be other ways to manage your debt, such as negotiating with creditors to reduce the amount owed or to establish a reasonable payment plan.
Chapter 7 Bankruptcy: A Brief Overview of Eligibility and Asset Liquidation
There is a multitude of relief options for Americans who are struggling with debt, and in some situations, filing for bankruptcy is a smart decision. Many debtors find that either chapter 13 or chapter 7 bankruptcy can put them on the path toward financial stability. Before filing for chapter 7 bankruptcy, though, it is important to understand if you are eligible and what may happen to your assets.
The best source of information about your unique bankruptcy case is an experienced attorney. A bankruptcy lawyer can evaluate your debts to determine which bankruptcy chapter - if any - is ideal for your particular situation. In the meantime, here is some important information about state median incomes and asset liquidation as they relate to filing for bankruptcy:
State Medians and Your Income
According to UScourts.gov, one of the factors that determine if a person qualifies for chapter 7 bankruptcy is his or her income. If your income is too high, a judge may request that you file for chapter 13 instead, because you will have the means to work with a structured payment plan. Of course, whether or not your income is high or low is relative to the state median.
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