When you file for Chapter 7 bankruptcy, most of your assets are sold to raise money to repay your debts. Obviously, you would try to keep as many of your properties as possible. There are some properties that can be redeemed and thus kept under Chapter 7 bankruptcy.
You redeem a secured property by paying off the secured portion of a loan. By so doing, you will be able to reduce your monthly debt payments by reducing the outstanding balance and hence keep the property.
Let’s say you want to redeem a vehicle valued at $15,000 which has a loan of $22,000 on it. You would pay the value of your vehicle ($15,000) in cash and get to keep the property. The balance of $7,000 is regarded as an unsecured debt and may be discharged depending on the details of the bankruptcy case.
However, redemption can only be applied to personal properties such as vehicles, household appliances etc that are used by you and your household. All forms of real estate do not fall under the category of personal property so they cannot be redeemed in bankruptcy. For real estate, you have other options to keep them when a mortgage is not fully secured by the value of the property.
Likewise, business property is also not eligible for redemption in Chapter 7 bankruptcy. While a personal vehicle can be redeemed, a car registered under your business name cannot even though you use it as a sole proprietor.
If you wish to redeem your personal property, call us at (813) 200 4133 to schedule an appointment for a free consultation. When you engage us, we will help you file a motion for redemption with the bankruptcy court.
Alternatively, you can look into other ways to keep your property such as reaffirmation. If you redeem your property, you will be discharged of future debt although it will entail some lump sum payment. On the other hand, if you reaffirm your loan, you will be subject to post-bankruptcy loan obligations. We will discuss the viability of keeping your property in light of all the options when you call us at (813) 200 4133.
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Filed under Chapter 7 (Tampa) by on Feb 1st, 2012. Comment. 
Cheating in Bankruptcy
Bankruptcy is your right under the law. The bankruptcy code is set up to help you out of your burdensome debts and could mean the difference between financial survival and financial ruin to you. But sadly there are some who take advantage of a good thing and try to game the system. Therefore it is no surprise that if you are caught cheating in bankruptcy, the punishment is very severe. Here are some ways irresponsible bankruptcy filers cheat in bankruptcy. I am highlighting these to you as a warning should you be tempted to try these things, not as an incentive to try them.
The first way people try to cheat in bankruptcy is to under-declare their assets. When you file for bankruptcy, you are supposed to declare ALL assets and liabilities. Non-exempt assets will be sold off to pay for your debts under Chapter 7 bankruptcy, while your assets will form the basis of the payment plan to clear your debts under Chapter 13 bankruptcy. So declaring fewer assets than you actually own obviously disrupts the whole process altogether whether you file for Chapter 7 or Chapter 13 bankruptcy. By under-declaring your assets, you are attempting to write off more debts than you should under Chapter 7 bankruptcy or pay less in installment payments than you ought to under Chapter 13 bankruptcy.
The second way people try to game the system in bankruptcy is by increasing their debts. Knowing that your unpaid debts after liquidating your assets will be discharged, you might want to charge your credit card to the maximum or take out additional loans just before filing for Chapter 7 bankruptcy. This is a serious offence and if you are deemed to have committed this by the bankruptcy trustee, he has the right to throw out your case, not to mention you are subject to a harsh penalty as well.
Another way to cheat in bankruptcy is by bribing the officials involved in your bankruptcy case, notably the bankruptcy trustee or even the judge. Bribery in any form is a crime and in bankruptcy cases it is no less so. If you bribe the bankruptcy officials to get them to grant you favorable terms, you will be slapped with a severe punishment.
The penalty for any of the above is a jail sentence of up to 5 years and/or a fine of up to $250,000. So do not engage in any of these surreptitious methods of cheating in bankruptcy. So do not cheat in your bankruptcy filing. Talk to us instead at (813) 200 4133. It’s free and won’t get you into trouble.
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Filed under Chapter 7 (Tampa) by on Feb 2nd, 2012. Comment.
After being discharged from bankruptcy, the primary problem most people face is obtaining credit. Unavoidably, your credit rating would have been adversely affected by your bankruptcy for between 7 to 10 years. So what would you do to obtain credit if you need it? One thing you must NOT do is approach a loan shark. Loan sharks offer loans at such exorbitant rates they should be considered illegal. This would only serve to put you into a debt you cannot afford to repay and may eventually lead you to another bankruptcy. So you would be doing yourself a great injustice if you take up a loan shark’s offer.
So here are some better alternatives for post-bankruptcy credit.
Get a loan from a family member or close friend
Someone you can trust is the safest option. But in these bad economic times, everyone is feeling the pinch so you should not take advantage of a family member’s or friend’s generosity and borrow more than you can comfortably repay. Neither should you borrow and not repay. If you have friends or family who are willing to help you financially, you should approach them as the first option.
Apply for a loan from a credit company
Conventionally, banks would be the last institutions to lend you money once they know you are a discharged bankrupt. But smaller lending institutions such as credit companies or credit unions might be more lenient. So approach these companies instead, especially when you have been a loyal customer with any of them before you bankruptcy.
Apply for a debit card or collateral-based credit line
A debit card can be used like a credit card but only up to the limit of the balance in your debit card account. It offers the convenience of cashless transactions without the stringent pre-approval process you have to go through to obtain a credit card. Alternatively, many banks offer some form of collateral-based credit like a personal loan against your savings account balance. Many banks offer such facilities with a minimum deposit of as low as $500. If you successfully apply for such a credit, you can prove your credit-worthiness to the bank over time and eventually qualify for a full-fledged credit card.
If you are contemplating filing for bankruptcy, call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Feb 3rd, 2012. Comment.
Automatic stay in bankruptcy is the provision in the bankruptcy code that puts into effect an immediate cessation of collection efforts by creditors on you once you file for bankruptcy. When you bankruptcy filing is confirmed, the court will inform your creditors accordingly and enforce the automatic stay. Sometimes, a creditor may try to collect payment outside the automatic stay but to do so he would need the judge to grant permission for these collection activities. In general, the automatic stay will be in force until the court reverses it or you exit bankruptcy.
Automatic stay gives you more time to handle finances. The provision is especially useful for those who are at risk of eviction, foreclosure, utility disconnection and or wage garnishment as it prevents you from being evicted or your property foreclosed, your utilities cut or wages garnished.
Certain payment obligations on your part are exempted from automatic stay, such as alimony payments and child support. When it comes to tax debt many people mistakenly classify it together with alimony and child support thinking that collection efforts by the IRS cannot be stopped by automatic stay.
But this is only partially true. The fact is automatic stay can prevent liens or property seizures by the IRS. And while alimony and child support payments are usually not dischargeable under Chapter 7 bankruptcy, certain tax debt may be dischargeable depending on the circumstances. Your tax debt may be eligible for discharge if it has been assessed by the IRS at least 240 days before filing, you have income tax returns filed for the last 2 years and the debt was due at least 3 years prior.
But if the bankruptcy court decides your tax debt is not dischargeable under Chapter 7 bankruptcy, you can opt for filing for Chapter 13 bankruptcy instead where you pay off your tax debts (along with other debts) under a payment plan. And as long as you abide by the terms of the payment plan, it is unlikely the IRS would make collection effort on you as long as automatic stay is in effect.
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Filed under Chapter 7 (Tampa) by on Feb 6th, 2012. Comment.
There are 2 types of bankruptcy applicable for individuals and both have their merits. However, the first of the two, Chapter 7 bankruptcy, is not so easy to qualify for because it is reserved for those whose average household income is below the average set by the state where the bankruptcy petitioner lives. The second type of bankruptcy is Chapter 13 bankruptcy, which is called the wage earner’s bankruptcy and is easier to attain. Chapter 13 bankruptcy involves repaying debts according to a payment plan set by the bankruptcy court. Here are some benefits of filing for Chapter 13 bankruptcy:
1. You get to keep your home, even if foreclosure is imminent
This major benefit of Chapter 13 bankruptcy allows you to keep your home even if it is about to be foreclosed. Furthermore, if you have been slapped with a lien on your other properties, they can be dismissed. In short, Chapter 13 bankruptcy enables you to cure missed mortgage payments, seek loan modification options besides dismissing a lien on other properties.
2. You get to keep your vehicles
Under Chapter 13 bankruptcy, you are allowed to reduce your vehicle installment payments. During the bankruptcy period, the court sets the amount you have to repay and your lender must accept what is paid to them. All in all, there are some debts that can be discharged through Chapter 13 bankruptcy that cannot be discharged under Chapter 7.
3. You and your co-debtors are protected from creditors
If you and a co-signer or co-debtor are jointly liable for certain debts, you both will be protected from the harassment of creditors while under bankruptcy as long as you make the required payments under the payment plan of Chapter 13. So you can be free from the stress of being in direct contact with your creditors. On the other hand, they will have to communicate with your bankruptcy attorney instead.
4. You can file Chapter 13 more often than Chapter 7
While no one wants to file for bankruptcy again and again, it is assuring to know that you can do so more than once if necessary. Under the law, you can file for Chapter 7 once every eight years but you can do so more often with Chapter 13 bankruptcy.
If you want to know more about how Chapter 13 bankruptcy can benefit you, call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Feb 7th, 2012. Comment.
