Archives for 2016

Converting A Bankruptcy Case From Chapter 13 To Chapter 7

Code Provision There are times when you may need to convert a chapter 13 bankruptcy case to a chapter 7 bankruptcy case. Section 1307 of title 11 USC provides for conversion or dismissal. In essence, under section (a), a debtor may convert a case under Chapter 13 to a case under Chapter 7 at any time. However, there are some restrictions to that general statement. A case may also be converted for cause, including unreasonable delay by the debtor that is prejudicial to creditors, nonpayment of any fees and charges required under Chapter 123 of title 28, failure to file a plan timely under section 1321, failure to commence making timely payments under section 1326, denial of confirmation of a + Read More

New Court Approved Retention Agreement For Chapter 13 Cases Arrives Suddenly

The New Agreement Getting paid as a chapter 13 debtor's attorney has always proven somewhat difficult. Not the least of which is that the debtor typically must make chapter 13 plan payments from which counsel can be paid. Add on top of that the fee application, the fee order and the presentment been before the court and there are plenty of moving parts from which failure is imminent. Which brings me to the new court approved retention agreement to be used by debtor's counsel and their clients in chapter 13 bankruptcy cases. The new agreement was announced on the bankruptcy courts website on September 12, 2016. The new agreement must be utilized in all cases filed on or after September 19, + Read More

Case Study For Mrs. C. From Wheeling, Illinois

  Nature Of The Debtor This is the chapter 7 bankruptcy case study for Mrs. C., who resides in Wheeling, Illinois. She has come to the office with the simple thought in mind to eliminate her outstanding credit card debt and medical debt. She has been struggling for approximately three years. Although she has been able to maintain the minimum monthly payments on her credit cards, she is no longer able to sustain herself based upon her newfound rental obligations. Let's examine the facts of her case. Current Outlook She is currently separated from her spouse and they are living in two separate states. She has no minor children. She is currently working as an instructor and has been + Read More

Paying Back As Little As Possible Under Chapter 13

When someone is looking to file chapter 13 bankruptcy, they obviously want to pay back as little as possible. They also want to gain the greatest amount of relief during the process. There are a number of factors that go into determining whether or not the monthly payment is going to be high, low, or somewhat in between. It is basically based on assets, liabilities, monthly income and monthly expenses. In a recent case, a client who filed five previous chapter 13 bankruptcy cases is seeking to have her chapter 13 plan payment lower than originally filed. Let's examine the facts of the case. Previous Filings As I mentioned previously, the debtor had filed five previous chapter 13 bankruptcy + Read More

When Assets Are At Risk, Consider Chapter 13

I came across a woman recently who was considering chapter 7 bankruptcy. She had a home that was underwater by more than $175,000. She had absolutely no intention of keeping the home. Her goal was to stay in the home for as long as possible, surrender it to the lender after a sheriff sale, and eliminate or discharge the underlying debt through chapter 7 bankruptcy. This sounded like a good plan until we examined her assets with a high level of scrutiny. Vehicle Assets The first hurdle that we had to get over in terms of assets was her numerous vehicles. She had two relatively old vehicles which were not going to pose a problem. One was a 1998 Chevy which was worth approximately $500 and + Read More

Taxes Owed To The IRS Could Be Discharged In A Chapter 7 Bankruptcy

Nobody wants to file for bankruptcy.  However, circumstances can spiral out of control and you can find yourself without any choice.  You were laid off from work or had unexpected medical bills. You had to make a choice between paying the monthly credit card bills or putting food on the table.  The choice is easy.  When you realize that you can’t keep up with your credit card payments, you consult with your bankruptcy attorney. What about income taxes?  Most clients don’t know that unpaid income taxes can be discharged if certain requirements are met.  It’s common that clients don’t list or bring up old income taxes owed as a debt, because they mistakenly believe that income taxes can + Read More

Filing Bankruptcy Should Not Kill A Loan Modification

Loan modifications come in many different forms and at many different times as they relate to a bankruptcy filing. The most common loan modification is one that avoids bankruptcy entirely. I'm referring to a person or couple that fall behind on their mortgage, reach out to their lender for loss mitigation opportunities and are lucky enough to complete the loan modification process to a successful conclusion. This can result in an interest rate reduction, a deferment of the default to the end of the loan, a change in the length or term of the loan and in the rarest of cases, provide for a principal reduction. If this is able to be accomplished initially, then there should be no interplay + Read More

Bankruptcy Case Study For Ms. Jones

This is the bankruptcy case study for Ms. Jones who resides in Joliet, Illinois. Ms. Jones was in the office today to determine whether or not Chapter 7 or Chapter 13 bankruptcy will provide some needed relief. Let's go through the facts and details of her case. Ms. Jones is not a homeowner. She is currently renting on a month-to-month basis. She is current with her landlord and wants to keep making those payments. In terms of personal property, she has a 2014 Nissan Altima, financed by Nissan Motor Acceptance. She owes approximately $15,000 on the vehicle and she feels it's worth less than that. Her current monthly payment is $360 per month, she is current on the payment and she wishes to + Read More

Filing Without Full Payment, Ok. Filing Without Full Documents, Problemati

It is very true that a Chapter 7 bankruptcy case can be filed without having the full attorney fees paid up front. In fact, there are some attorneys that are willing to advance even the filing fees in certain circumstances.  However, for a valid Chapter 7 bankruptcy case to be filed, there are certain documents and prerequisites that must be satisfied. Credit Counseling Requirement For example, before any Chapter 7 bankruptcy case can be filed, absent exigent circumstances, the debtor must complete a credit counseling session from an office or agency approved by the executive office of United States Trustees. This session could last anywhere from one to two hours, with a cost of + Read More

Bankruptcy Case Study For Michael M.

  This is the bankruptcy case study for Michael M., who resides in Aurora, DuPage County, Illinois. Michael is currently being garnished for a hospital bill and is seeking protection under the bankruptcy code. He is inquiring as to whether or not he can file a Chapter 7 to stop the garnishment and yet keep all of his personal property free from the trustees reach. He did file a Chapter 13 bankruptcy case more than 10 years ago and that case failed. He simply was unable to make monthly payments on a consistent basis. In this effort, he does not feel he has the ability to make monthly payments. For that reason, in addition to the current garnishment, he needs the help of a + Read More