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

It’s Getting Harder And Harder To Get Paid In A Chapter 13 Bankruptcy Case

Chapter 13 bankruptcy cases are difficult for the debtor as well as the attorney. The debtor has to fulfill a series of requirements prior to filing as well as additional requirements subsequent to filing. The attorney does the bulk of his work upfront and fights to get paid as the case progresses. In recent weeks, it was discovered that a particular chapter 13 trustee in Chicago waits to pay the attorney fee for longer than was expected.  He denied this practice.  However, his staff has put in writing said practice and states that this is how it has always been done. This has caused the loss of fees as well as set payments being made to secured creditors in advance of attorney's + Read More

Chapter 13 Bankruptcy Considerations From A Legal Perspective

  There are five major areas of concern when considering filing for Chapter 13 bankruptcy.   1) The first concern is the type of debt. There are certain debts that can be eliminated in a Chapter 13 at less than 100% payback. There are other debts that cannot be eliminated and must be paid back in full through the plan. Thus, the first consideration that an attorney must look at is the type of debt that a client has.  In many cases, most of the debt can be easily compromised. I'm referring to parking tickets, credit cards, medical bills, unsecured loans, utility bills and most debts for services rendered. On the other hand, we do run across cases where the outstanding debt is + Read More

Parking Tickets Incurred After Filing Chapter 13: What Can Be Done?

A Chapter 13 debtor filed for bankruptcy on September 11, 2014. Within the Chapter 13 case, he planned on repaying approximately $4,700 worth of parking tickets owed to the city of Chicago. The proposed plan was going to pay back approximately 10% to 20% of those parking tickets over a 3 to 5 year term. Everything was going smoothly for the debtor until the time that he received a notice from the city of Chicago. It appears that subsequent to the filing date of September 11, 2014, the debtor, or somebody driving the debtor's vehicle, incurred parking tickets owed to the city of Chicago. The total outstanding debt, which was all incurred after the original filing date, totaled approximately + Read More