One of the most dreaded things anyone can face is the foreclosure of their home. This is because foreclosure threatens our basic need for security. But if debts are mounting and you fall behind in your mortgage payments, it is only a matter of time before your bank takes foreclosure action. Is there anything you can do about it? Yes. You can file for bankruptcy protection.
Depending on your situation, a bankruptcy filing may halt foreclosure proceedings. There are two types of bankruptcies for individuals. The first is Chapter 7 bankruptcy which is where your non-exempt properties are sold to repay your debts. Chapter 7 bankruptcy is useful if you are not behind in your mortgage payments but have run into unexpected financial problems like a huge medical bill that you need time to repay. Should you file for bankruptcy under such circumstances, there is a high chance that your Chapter 7 bankruptcy will stall your mortgage payments until you exit bankruptcy. After the discharge, your mortgage will continue as scheduled. This is how Chapter 7 bankruptcy can affect your mortgage and help you avoid foreclosure to your home.
The second type of bankruptcy for individuals is Chapter 13 bankruptcy or reorganization bankruptcy. Under this type of bankruptcy, your bankruptcy debts are put into a repayment plan that can stretch up to five years. Thus, your mortgage will be included in this plan. When you start repaying your bankruptcy debts according to the plan, you can avoid foreclosure. Chapter 13 bankruptcy will be more useful to you if you have fallen too far behind your mortgage payments and your bank has initiated foreclosure proceedings. But there is a proviso.
The bankruptcy court will only grant your mortgage to be included into your bankruptcy assets provided you are not too far into the foreclosure process. If the bankruptcy judge feels that you owe too much to the bank already and that the foreclosure process has gone on for too long, then he or she may strike out your mortgage from the rest of your bankruptcy assets. In such a case, there may be nothing you can do to save your home.
To decide whether you should file for bankruptcy and discuss how your home can be saved from foreclosure in bankruptcy, call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Jan 11th, 2012. Comment. 
When your bankruptcy is discharged it means you have successfully exited bankruptcy protection and you can start afresh financially. Discharges in bankruptcy take place under different circumstances. For each discharge, certain criteria must be met. Usually, this has to do with meeting financial obligations by the debtor in paying off his or her debts.
For example, a discharge in Chapter 7 bankruptcy happens when all non-exempt assets are liquidated to pay off your debts. Any other debts that are still outstanding after liquidating all non-exempt assets are generally forgiven. It is for this very reason that it is not easy to qualify for Chapter 7 bankruptcy. Only if your household income is below the median household income set by your state can you be eligible to apply for Chapter 7 bankruptcy. Otherwise, an applicant for Chapter 7 bankruptcy must take and pass a means test.
If you do not pass the means test, chances are you would be eligible for Chapter 13 bankruptcy. Chapter 13 bankruptcy is where you pay off your debts according to a payment plan approved by the bankruptcy court. This payment plan is meant to be affordable to the debtor to enable him or her to pay debts according to the bankruptcy trustee’s prioritization schedule. Discharge from Chapter 13 bankruptcy comes about when the debtor keeps to the payment plan and pays off all the debts according to plan.
But what if despite the payment plan, you still cannot afford to keep up with the installments? The bankruptcy trustee will revise your payment plan to make it more affordable but sometimes due to unavoidable circumstances like a drastic drop in financial income, no payment plan is going to work.
This is where hardship discharge comes in. The debtor can seek to file for a hardship discharge. In order to be granted a hardship discharge, the debtor must have at least paid some amount towards the payment plan, typically at least the amount they would have paid if they had filed a Chapter 7 bankruptcy. If the bankruptcy judge is satisfied with the payments made thus far, a hardship discharge may be granted under the circumstances.
The rationale behind it is that if the person were to transfer to a Chapter 7 from their Chapter 13 they would be unfairly subject to seizure of their assets, which is more than they would have been required to pay under either chapter.
The only other option besides a hardship discharge is to cancel the Chapter 13 bankruptcy and file for Chapter 7 instead.
In any case, the best thing to do would be to discuss these options with an experienced bankruptcy attorney. If you wish to speak to a bankruptcy attorney on your situation, call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Jan 5th, 2012. Comment.
In 2005, the government implemented a wide range of reforms insofar as bankruptcy was concerned. The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) and Bankruptcy Abuse Reform Act 2005 were passed by lawmakers aimed at protecting consumers and preventing rampant bankruptcy filings as an easy means to absolve responsibility over debts.
With the enforcement of these Acts, there are several regulations you need to adhere to. Here are the main ones:
• Federal tax returns must be current
Before you are allowed to file a bankruptcy petition, you must have your tax returns current even if you have not been able to pay all your taxes. This means that if you have missed out on submitting your tax returns for certain years, you need to make your submissions are done. This is a prerequisite for the obligatory meeting with creditors (called the 341 meeting). You must submit copies of your tax returns to the bankruptcy court, the bankruptcy trustee and sometimes to certain creditors as well.
• Credit counseling must accompany bankruptcy.
You must complete a course in credit counseling within 180 days before your bankruptcy is discharged. The counseling is conducted by approved credit counseling agencies and can be done in person, over the phone or online. Upon completion of the counseling you should be given a certificate of attendance. This certificate is needed to show you have undergone credit counseling.
• Financial management course is mandatory
You also need to complete a personal financial management course recommended by your bankruptcy trustee. The purpose of this course is to equip you with necessary skills in managing your finance in a more efficient manner.
• Provide pay stubs at least for the last 60 days to the bankruptcy court
• Submit annual statement of income and expenses
For Chapter 13 bankruptcy filings, you’ll have to submit an updated statement of income and expenses every year to the bankruptcy court.
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Filed under Chapter 7 (Tampa) by on Jan 3rd, 2012. Comment.
When filing for bankruptcy, the best thing to do to make the process as seamless as possible is to hire a bankruptcy lawyer. A bankruptcy lawyer will do a lot of things for you, not least of which is guide you through the entire process (which can be very complicated, unless you are very well versed with the bankruptcy code). One of the most common types of bankruptcies chosen by individuals is Chapter 13 bankruptcy.
Here are some helpful pointers for your Chapter 13 bankruptcy filing.
Firstly, Chapter 13 bankruptcy is only for individuals and sole proprietors, not for companies or partnerships. If you wish to file for bankruptcy for your company or partnership, you need to file it under Chapter 11 bankruptcy.
Secondly, Chapter 13 bankruptcy is preferred by the bankruptcy court and is easier to gain approval compared to Chapter 7 bankruptcy (the other type of bankruptcy filing for individuals). This is because Chapter 13 bankruptcy is involves a payment plan stretched out over a period of time (up to 5 years) whereas Chapter 7 is liquidation bankruptcy where your non-exempt assets are sold off to pay for your debts.
Thirdly, there are some prerequisites to filing for Chapter 13 bankruptcy. For instance, you need to be earning a steady income. It does not have to be a high income but it must be consistent. If you only earn income sporadically it may not be considered good enough to qualify you for Chapter 13. The consistent income requirement is to ensure that you and your family have enough finances to sustain a reasonable living while repaying your debts under Chapter 13. If your income is inconsistent, the bankruptcy court may decide you do not have enough to survive while undergoing bankruptcy and hence your bankruptcy plan will not be approved.
Fourthly, you must not have debts exceeding the limit set by the bankruptcy court. If you do, your bankruptcy filing is not likely to be approved. This limit may change from time to time.
Fifthly, you must be current with your tax filings. If you have not filed your taxes for certain years, you need to bring it up to speed before filing for bankruptcy. You may still have tax debts but you must not be behind in your tax filings.
Finally, you must fulfill the residency requirements of your state. Depending on which state you live in, there are certain requirements set by the state government. Generally, you file for Chapter 13 bankruptcy in the state you reside in, but certain states have a time requirement in that you must have been living in that state for longer than a certain time to be permitted to file for bankruptcy there. Otherwise, you would be required to file for Chapter 13 in the last state you lived in (or the one you lived in for the longest time).
For more information regarding Chapter 13 (or Chapter 7) bankruptcy, call us at (813) 200 4133 for a free consultation.
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Filed under Chapter 7 (Tampa) by on Dec 28th, 2011. Comment.
What a Bankruptcy Trustee Does in Chapter 7 Bankruptcy
When you file for Chapter 7 bankruptcy, the bankruptcy court will appoint a trustee to oversee your case. The trustee’s overall responsibility is to liquidate non-exempt assets to pay off as much of your debts as possible. It would be to your advantage to understand the role of the bankruptcy trustee so that you can cooperate with the trustee and have your bankruptcy discharged as soon as possible.
The first thing the bankruptcy trustee does is review your bankruptcy petition to see that everything is in order. In doing so, the trustee will examine your assets to determine which are exempted from being liquidated and which are not. So it is imperative that you list all your assets and debts in your bankruptcy petition. If the trustee detects any discrepancies or irregularities, he may dismiss your case.
Sometimes, you may miss out listing certain assets either due to a genuine oversight or because you have received the asset only after filing for bankruptcy. For example, if you are involved in a lawsuit prior to filing for bankruptcy and you are awarded assets in judgment post-filing, this asset may not be listed in your list of assets. In such a case, you need to inform your bankruptcy attorney who will in turn inform the trustee of the asset(s) that are not in your list.
Another major thing the bankruptcy trustee does is to convene the meeting of creditors where the trustee once again reviews the bankruptcy petition and confirms it with your bankruptcy attorney. This is where you get another chance to rectify any errors or insert any missing information into your petition. The best thing to do would be to inform your bankruptcy attorney about any changes you need to make to your bankruptcy petition so that you attorney can liaise with the trustee and make the necessary changes promptly. If you are considering filing for bankruptcy and need a bankruptcy attorney, call us at (813) 200 4133 for a free consultation.
One of the bankruptcy trustee’s main tasks is to determine non-exempt assets by reviewing your list of assets. If you state that a certain asset is exempted from liquidation, the bankruptcy trustee (and any of the creditors) can challenge it. On the other hand, the trustee may review a non-exempt asset and determine that it may not be worth liquidating and hand it back to you.
If the bankruptcy trustee finds no non-exempt asset, he or she will file a “Notice of No Assets” and discharge the case. All non-exempt assets will be liquidated to pay off debts after the bankruptcy trustee deducts his or her administrative fees from the proceeds.
It would not be uncommon to overlook valuable bankruptcy exemptions. In such a situation, the bankruptcy trustee will not educate you about overlooked bankruptcy exemption which is why having a bankruptcy attorney to advise you is so important.
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Filed under Chapter 7 (Tampa) by on Dec 23rd, 2011. Comment.
