For most of us, a car is a necessity. Very few people can survive in an urban setting without a car in the 21st century. At the same time, most people own a car through obtaining a car loan. If you fall behind in your car loan repayments, the lender has a right to repossess the car. When you file for bankruptcy, that is what is likely to happen. The lender would demand the car back and sell it at an auction. If the proceeds of the auction is insufficient to cover the outstanding loan, the lender will initiate a lawsuit against you to recover the balance.
So is there a way to keep your car when you file for bankruptcy? Here are some things you can do.
When you file for Chapter 7 bankruptcy, you can “redeem” the car by paying the lender the value of the car and discharging the rest of the car loan in bankruptcy. On the other hand, if you file for a Chapter 13 bankruptcy, your car can also be “redeemed” if the car loan is more than 910 days old or if the loan was not used only for purchasing the loan (i.e. a rollover loan from a trade-in).
Furthermore, if you do not have enough money to pay the value of the car to the lender, you may take up a loan to do so even while in bankruptcy. This is good news if you have an upside down car loan (a situation in which the market value of the car is less than the outstanding car loan). You can file for bankruptcy and keep your car.
Another thing you can do to keep your car in bankruptcy is reaffirm your car loan with the lender. This means you confirm with the lender that despite filing for Chapter 7 bankruptcy, you will continue paying the car loan installments. And the lender agrees not to repossess your car as long as you maintain the car loan repayments during bankruptcy.
The only problem with reaffirming your car loan is that if you fall behind on your payments after your bankruptcy is discharged, the lender can still repossess the car and sue you for the balance of loan. in view of this, you should always discuss your reaffirmation agreement with a bankruptcy attorney before entering into one with your lender.
If you wish to file for bankruptcy or discuss matters about bankruptcy, call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on May 16th, 2012. Comment. 
If you are a married couple thinking of filing a bankruptcy petition, there are some considerations you should bear in mind before doing so. You may opt either to file a petition jointly as a couple or separately as individuals. If that is the case, which is more advantageous? It usually depends on how your debts are structured.
If most of your debts are in joint names, it makes more sense to file a joint petition for bankruptcy protection. But if your debts are incurred separately, filing individually would make more sense, since your creditors would have accounts with your separately.
Another consideration you should think about is the type of bankruptcy to file under. If you file for a separate Chapter 7 bankruptcy, the filing may not protect your spouse from being contacted by creditors. Chapter 7 bankruptcy brings along an automatic stay on creditors that prevents them from contacting you for payment but it may not protect your non-filing spouse from creditor actions. On the other hand, filing for Chapter 13 bankruptcy may entail co-debtor protection while the petition is ongoing.
There are many types of debts that may be in joint names such as credit card debts. These debts can be cleared through a joint bankruptcy filing. A joint filing may also save you money since you will only be charged for one filing.
If you and your spouse are headed for a divorce, you may want to consider filing bankruptcy separately. This would help make things easier when it comes to distribution of assets and debts later. A bankruptcy filing may carry different implications depending on which state you reside in. If you file in a community property state, it is possible for bankruptcy laws to protect the non-filing spouse.
If you wish to discuss your financial situation and explore the possibility of bankruptcy as a way to wipe your slate clean of all your debts, call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on May 15th, 2012. Comment.
If you are under bankruptcy protection or considering filing a bankruptcy petition, you may be wondering how long the whole process would take. Well, the answer to that largely depends on which chapter of bankruptcy you file for. In addition, it usually also depend on the amount of debt you hold. Let’s look at the two applicable types of bankruptcy for individuals – Chapter 7 and Chapter 13.
Chapter 7 bankruptcy is known as liquidation bankruptcy because you have to liquidate certain assets to pay off your debts. Chapter 7 bankruptcy normally takes between 4 to 6 months before all your qualified debts can be discharged if there are no objections filed by any of your creditors. The types of debts that are dischargeable under Chapter 7 are usually unsecured debts such as credit card debts or medical bills. If you have little or no source of income and few assets, it is advisable for you to file for Chapter 7 bankruptcy.
Under Chapter 7, you provide a list of all assets and debts to the bankruptcy court. A bankruptcy trustee (who is appointed by the bankruptcy court to administer your bankruptcy) will review your list of assets and liabilities. Then you bankruptcy trustee calls for a meeting with creditors. If everything goes smoothly, the whole process is normally over within 6 months.
Chapter 13 bankruptcy is also called the workers’ bankruptcy and it is basically a consolidation of your debts by the bankruptcy court. The court assigns you a bankruptcy trustee who draws up a payment plan to clear your debts within 3 to 5 years. Once the bankruptcy court approves of the plan, you start repaying your debts. The advantage of a Chapter 13 is that you do not have to liquidate any of your assets.
To comply with the payment plan, you would normally have to be employed or have a steady source of income. Don’t worry about whether you can fulfill your obligation to pay because the repayment amount would be set by the bankruptcy court in accordance with your level of income. In fact, it is not uncommon for the amount of payment on some of your debts (such as your car loan installments) to be reduced by the court.
Your bankruptcy trustee will also call for a meeting with creditors and then monitor your repayments during the period of your bankruptcy. As long as you keep up with your payments, things will go smoothly and you should exit bankruptcy after your debts have been paid up according to your repayment schedule.
Chapter 13 bankruptcy has helped many people pay off outstanding debt, retain personal property and discharge qualifying debt at the end of the payment period.
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Filed under Chapter 7 (Tampa) by on May 14th, 2012. Comment.
If you wish to file for bankruptcy, there are two options for you as an individual. Both have their pros and cons and which is better suited for you depends on your circumstances. The two options are Chapter 7 and Chapter 13 bankruptcy.
In essence, Chapter 7 bankruptcy allows you to discharge certain debts that qualify even if you do not repay them. To the debtor, this is great but to the creditor, this sounds like a cop-out. Actually, it is not because there are stringent conditions to be met before this can be applied to any situation. In Chapter 7 bankruptcy, you non-exempt assets will be liquidated to pay off your debts. So this means you lose some of your assets. But don’t worry about losing the roof over your head. Generally, your principal residence is one of the exempted assets that will not be liquidated. Only after all your non-exempt assets have been liquidated will any further outstanding debt be considered for discharge. For more information about which assets are exempted and which are not, consult a bankruptcy attorney.
If you are thinking of filing for bankruptcy protection and have not engaged a bankruptcy attorney (or have engaged one but wish to change), call us at (813) 200 4133 for a free consultation.
Besides having to lose some of your assets, the other disadvantage of Chapter 7 bankruptcy is that you have to pass a means test in order to be eligible to make a petition. The means test is the average amount of income a household earns in your state. If you income is lower than the average income in your state, then you are eligible to make a Chapter 7 petition in your state. So if you are unemployed, you should seriously consider filing for Chapter 7 bankruptcy because you will pass the means test. If you do not pass the test, you will have to file for Chapter 13 bankruptcy instead.
On the other hand, the advantages of Chapter 13 are also many. Chapter 13 bankruptcy allows you to clear all your debts through a payment plan over 3 to 5 years. And the best thing about this is that none of your assets need to be liquidated, so you do not lose any of them.
Chapter 13 bankruptcy can help you cure missed mortgage payments, obtain modifications to your loan and remove any liens against second and third mortgages. All this can be done during the payment plan period set during the Chapter 13 filing. Also, you may be able to lower the amount of repayment you make on your vehicle payments under a Chapter 13 bankruptcy. If you have a qualifying vehicle, the principal loan amount along with the interest rate can be reduced. Furthermore, there are certain debts that are not dischargeable under Chapter 7 but are under Chapter 13 bankruptcy.
The final advantage I’d like to bring up for Chapter 13 bankruptcy is that you can file a Chapter 13 bankruptcy more often than you can for Chapter 7. Under both types of bankruptcy, there will be an automatic stay that comes into effect the moment your make your petition. This means your creditors are barred by the law from contacting you or harassing you for payment.
However, the clear disadvantage of Chapter 13 bankruptcy is that to be eligible, you have to have a steady source of income i.e. you have to be employed.
So in brief, if you are unemployed and do not mind losing some of your assets, you should file for Chapter 7 but if you are employed and wish to keep your assets, you should opt for Chapter 13 instead. Both have their advantages as listed above.
If you wish to discuss bankruptcy for your situation, call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on May 11th, 2012. Comment.
Credit and Financial Management Courses in Bankruptcy
As a prerequisite for filing for bankruptcy, you have to take up a course that gives you credit counseling. This applies to both Chapter 7 and Chapter 13 bankruptcy. Once you complete this credit counseling class, you would be allowed to file your bankruptcy petition. After filing for bankruptcy, there is another course that you are obligated to take. It is a course on financial management. This is a prerequisite for receiving your discharge through bankruptcy and must be taken within the first 45 days of filing for bankruptcy.
The purpose of the financial management course is threefold:
1. The enlighten you on the benefits of creating short-term and long-term financial goals
2. To guide you on how to draw up a budget
3. To give you practical instructions on how to balance a checkbook and reconcile bank statements
Both these courses are designed to improve your financial knowledge and skills and help you avoid having to file for another bankruptcy in future. There is usually a list of centers approved by the US government you can register with to take up these two courses. Consult your bankruptcy attorney on where and how you can take these two mandatory courses. Failing to take up the course on financial management would likely result in your bankruptcy case being closed.
After you file for bankruptcy, there are often many things to attend to and you may inadvertently forget to attend the financial management course by the 45 day deadline. If that happens, you should check with your bankruptcy attorney or trustee to find out if your case has been closed. If it has not, it is not too late to attend the course. You will be awarded a certificate upon successful completion of the course, which you need to file with the bankruptcy court.
However, if your bankruptcy case has been closed, you should appeal to the judge to reopen the case for the purpose of filing the Financial Management course certificate. Most judges would allow you to do so. But you do need to pay a fee to reopen your case, which is about $200. But this fee would be worth it if you can have your qualified debts discharged through bankruptcy.
If you wish to file for bankruptcy, call us at (813) 200 4133 for a free consultation. Bankruptcy is your right under the law and is a provision for you to have your qualified financial debts discharged, thereby enabling you to have a fresh start financially.
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Filed under Chapter 7 (Tampa) by on May 10th, 2012. Comment.
