There Is Only One Absolute Requirement Prior To Filing Bankruptcy

Code Requirements The bankruptcy code enumerates several items that need to be provided in terms of bankruptcy filing. These include, but are not limited to, credit counseling, production of tax returns, production of pay advices and other items that may be requested by the panel trustee or Chapter 13 trustee. If your bankruptcy attorney is requiring that all of the items be provided prior to filing, then you are receiving some misinformation about what is actually required to file for bankruptcy. One Absolute Requirement The only absolute requirement which must be satisfied before a bankruptcy case can be filed under either Chapter 7 or Chapter 13 of the bankruptcy code is the completion + Read More

What A Difference A Bankruptcy Chapter Makes: What A Relief!

Two Common Chapters Most people are aware that there are two common chapters of bankruptcy for individuals and families. The two chapters are chapter 7 and Chapter 13 of the United States Bankruptcy Code. Nearly 75% of all bankruptcy cases are of the chapter 7 variety. Chapter 7 provides for a fresh start for someone who has very little in the way of assets. However, there are exceptions to the fresh start under Chapter 7. These exceptions include student loans, recent taxes, parking tickets, child support, maintenance, and debts incurred by fraud. The remaining 25% or so of bankruptcy cases are of the chapter 13 variety. Chapter 13 allows for the reorganization of debt over a 3 to 5 year + Read More

Chapter 7 Bankruptcy Case Study For March, 2016

This is the chapter 7 bankruptcy case study for Ms. G., who resides in Chicago, Illinois. We are here to examine whether or not Ms. G. can qualify and benefit from a chapter 7 bankruptcy filing. Let's examine the facts of her case: she is currently residing in Chicago and she is renting. Her rental arrangement is month-to-month and her landlord lives in the very same building. She owns a 2007 Dodge Nitro which is financed by Honor Finance. The monthly payment on the vehicle is $342, her outstanding balance is $6,090 and she is current on the payment and would like to keep it. She also has a second vehicle, a 2004 Ford Explorer which is paid in full. We value that vehicle at approximately + Read More

Don’t Let Your Bankruptcy Case Close Without A Discharge

Your bankruptcy case should never close without a discharge. To prevent this from happening, you must complete a two hour financial management course at some time after your case is filed and prior to discharge. This gives you a window of approximately three months to complete the financial management course. If you fail to do so, your case will close without a discharge. At that point, creditors are free to pursue collection efforts against you until such time that you bring a motion to reopen the case, to allow for the filing of a financial management certificate and subsequent case closing. This motion to reopen is accompanied by a filing fee of $260 as well as a typical attorney fee + Read More

Your Tax Refund May Not Be Safe In A Chapter 7 Nor In A Chapter 13 Bankruptcy Case

Tax Refunds Time It's that time of year again. This is the time when many debtors look forward to receiving their federal and state income tax refunds. Debtors rely on these refunds all year long to get them through this period of time. Throw in the bankruptcy wrinkle. A debtor who is struggling financially seeks the protection of the bankruptcy court only to realize that the tax refund is potentially at risk. This is true in both the chapter 7 and the chapter 13 bankruptcy case situations. Chapter 7 & Your Refund Let's examine the chapter 7 scenario. Under Illinois exemption laws which apply to a chapter 7 bankruptcy case, an individual is allowed to protect up to $4000 worth of + Read More

When Your Chapter 13 Plan Payment Is Not Written In Stone?

In most chapter 13 bankruptcy cases, upon confirmation, a monthly payment is set in place and it will not vary. However, there is always an exception to this rule. In some circumstances, the debtor can bring a motion to modify the plan such as a case where there is a significant decrease in income. Well what is good for the goose is good for the gander. Thus, the Chapter 13 trustee has the ability to bring a motion to increase the plan payment should there be a significant increase in income. This is provided for under section 1329 of the United States Bankruptcy Code which is entitled “modification of plan after confirmation.” One of my recent debtors just incurred this event. In our + Read More

The Importance Of The Non-Filing Spouse In Chapter 13 Bankruptcy

Not every married couple files a joint chapter 13 bankruptcy case. However, the income and expenses of the non-filing party is critical in determining how much the filer has to pay per month to a Chapter 13 trustee and for how long. This relatively new concept stems back to the bankruptcy reform of October 17, 2005. Prior to that date, a person filing for Chapter 13 bankruptcy was only required to submit his or her income and expenses as well as all of the debts. After the law change, the non-filing spouse or the total household income of the parties became the standard by which chapter 13 cases were governed. Let's take a look at a recent example: A woman came in the office recently + Read More

Confirmation Of A Chapter 13 Plan: The Liquidation Test

When a chapter 13 case is up for confirmation, the court, the trustee and the debtor must comply with section 1129 of 11 U.S.C.  This section deals with confirmation of a plan and it lists all the different factors that must be complied with for the court to sign an order confirming the plan. Most debtors and their counsel are aware of the requirements for filing a Chapter 13 in general. Those include completing a credit counseling session prior to filing, submitting the most recent four years of federal tax returns to the trustee, providing the most recent two months prior to filing of pay advices and any subsequent amendments or documentation that the trustee requires post-filing. What is + Read More

Chapter 13 Filing With Limited Debts

When Chapter 13 Makes Sense There are certain circumstances where chapter 13 makes perfect sense even though there may not be a lot of debt being repaid. A perfect example of this would be if a person's driver's license is suspended due to failure to pay parking tickets to the City of Chicago. Let's say this person needs that vehicle to get to and from work. If the debtor's license is suspended, chapter 13 is going to be the only option to regain driving privileges other than working into an installment payment plan with the City of Chicago. Often times, the city will not be amenable to a payment plan and the debtor is forced to either borrow a significant sum of money from family and + Read More

Is My Chapter 13 Bankruptcy Case On The Verge Of Dismissal?

Chance For Dismissal This is a question that comes up on nearly every chapter 13 bankruptcy case that is filed. It is almost impossible to make it through the chapter 13 filing process without some sort of difficulty. The difficulty might stem from the trustee, a creditor, the regulations, or the debtor himself. There are certain situations where a case cannot be confirmed by the trustee because the debtor has not satisfied the requirements of a confirmable plan. This could be based on the debtor's inability to substantiate specific expenses, provide documentation for certain debts, or from the debtor's inability to comply with the law. A debtor often will find motions to dismiss filed by + Read More

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