Involuntary Bankruptcy. Joint Bankruptcy Petitions for Married Couples. Collections and Bankruptcy. Bankruptcy Procedures. Foreclosure and Bankruptcy. Lien Avoidance in Chapter 7 Bankruptcy. Lien Stripping in Bankruptcy.
Unemployed People Filing for Bankruptcy. Protecting Your Assets During Bankruptcy. Taxes and Bankruptcy. Alternatives to Bankruptcy. Elderly People Filing for Bankruptcy. Divorce and Bankruptcy. Preparing for Bankruptcy. Automatic Stays in Bankruptcy. Repeat Bankruptcy Filings. Business Bankruptcy. Emergency Bankruptcy. Involuntary Bankruptcy. Joint Bankruptcy Petitions for Married Couples.
Chapter 7 Bankruptcy Exemptions. Chapter 13 Bankruptcy Exemptions. Federal Bankruptcy Exemptions. Federal Nonbankruptcy Exemptions. The Homestead Exemption in Bankruptcy. The Motor Vehicle Exemption in Bankruptcy. The Wildcard Exemption in Bankruptcy. Non-Exempt Property in Bankruptcy. Collections and Bankruptcy. When your Chapter 13 case is dismissed , you are often in a far worse financial position. Since you now have paid the costs of bankruptcy - attorney fees and filing fees, a seven year flag on your credit report — without receiving the main benefit of bankruptcy, a fresh start.
One of the most alarming trends relating to Chapter 13 is the data showing that is not applied evenly. Across the country, the odds of black debtors choosing Chapter 13 instead of Chapter 7 are over twice as high as for white debtors with a similar finances. And once black debtors chose Chapter 13, the odds of their cases being dismissed — with no relief from their debts — were roughly 50 percent higher. But it does mean that the law may be applied unevenly in ways that are important to consider before filing.
The reality, however, is that because roughly two-thirds of Chapter 13 cases fail, most of the time Chapter 13 does not help you keep your property. Desperate Chapter 13 filers can spend years and multiple bankruptcy cases trying to save a car from repossession.
Take this story of a Memphis resident, interviewed by Pro Publica , who filed for Chapter 13 four times in the past 7 years to hold on to her car:. The first time, she lost her job a year and a half after filing, and her case was dismissed after she fell behind. She then filed a third time. Considering how few Chapter 13 cases result in discharge, how much you are willing to pay for the slim chance of protecting your property in Chapter 13?
Unlike Chapter 7 where legal fees always must be paid up front, Chapter 13 attorney fees can be extended over the 5 year life of the plan. And even if you fail, the attorney can still generate fees from the fees that are paid before dismissal. Another argument made in favor of Chapter 13 is that it teaches you to live within a budget.
For those cases that fail, there is no lasting debt relief and most likely no lasting budgeting improvement either. One of the popular uses of Chapter 13 in recent years has been to recover your drivers license.
Drivers licenses are frequently suspended by city and state governments when the driver owes a significant amount of parking or traffic tickets. Unpaid tickets cannot be discharged in Chapter 7, but they can be discharged in Chapter This system ensures that creditors don't get less in Chapter 13 than they would have received in a Chapter 7 case.
In a Chapter 13 bankruptcy , you propose a plan to repay some or all of your debts through monthly payments that you'll make to a bankruptcy trustee. There are a lot of complicated rules that go into a repayment plan, but in general, the amount you'll pay will depend on your:. The first step is to determine your disposable income by deducting allowable expenses from your monthly income.
Then you'll multiply your disposable income by the number of months in your repayment plan. The second step is to determine the value of your nonexempt assets. Each state allows filers to keep some property using the state's bankruptcy exemptions. Nonexempt assets are those things that you can't protect with a bankruptcy exemption. In Chapter 13, you must pay your creditors the value of your nonexempt assets in your repayment plan.
The third step is determining which debts you must pay in full in a Chapter 13 plan. These debts include mortgage and car payment arrearages if you plan to keep the house or car , recently incurred income tax debt, and support arrearages.
Once complete, you'll have three numbers in front of you. Over the course of your plan, you'll be required to pay the greater of:. By complying with this formula, you'll satisfy what's known as the "best-effort" rule in Chapter 13 bankruptcy. Keep in mind that calculating a repayment plan is complicated.
This simplified explanation shouldn't be used as an instructional guide but rather to aid understanding only. You'll find more details in The Chapter 13 Repayment Plan. People who don't own much nonexempt property and don't have any debts that they must pay in full will have an easier time drafting a confirmable plan a plan that the judge will approve at the Chapter 13 confirmation hearing.
0コメント