Archive for November, 2014

Thanksgiving and the Biblical Jubilee: Being Thankful for Special Home-Saving Tools-Part 1

Bankruptcy directly helps get you current on your real estate taxes and protects your home from income tax liens. When it comes to your home, bankruptcy hugely helps by providing effective ways to deal with debts that are secured by liens against your home’s title. Of the four most important home lien-resolving tools of bankruptcy, we cover property taxes and income tax liens today. We’ll get to judgment lien “avoidance” and junior lien “stripping” in our next blog post. 1. Catching Up on Property Taxes Falling behind on your home’s property taxes is dangerous for two distinct reasons:
  1. If the

Thanksgiving and the Biblical Jubilee: Being Thankful for Special Chapter 13 Tools

Give thanks for Chapter 13 protection from collection of income taxes & back child/spousal support, & for saving tons of money on your vehicle loan.   Here are four very powerful tools of Chapter 13 “adjustment of debts,” none of which are available under Chapter 7 “straight bankruptcy.” 1. Stop Aggressive Collection of Support Arrearage If you fall behind on your child or spousal support payments, your ex-spouse and the state’s support enforcement agency have some extraordinary ways of getting money out of you and/or pressuring you to pay up. In most states this includes not just garnishing your wages…

Thanksgiving and the Sabbatical and Jubilee Years: Mercy in the Law — Debt Forgiveness and Chapter 7

Debt forgiveness is a Judeo-Christian tradition grounded in scripture.   Some of our current Chapter 7 features allows honest debtors to get rid of judgment liens and older income taxes, lets business debtors avoid the “means test” and lets them keep a vehicle loan.

Many people who have never been in trouble financially take a dim view of debt forgiveness in bankruptcy.   Many of these people do not know that debt forgiveness is a biblical concept written right into the mosaic law.  Debts were forgiven every seven years under the mosaic law (Deuteronomy 15)  and every fifty years debts were forgiven…

The Honest Debtor: How Does Chapter 13 let you Keep Possessions that a Chapter 7 Doesn’t?

Chapter 13 saves the day if your possessions are not fully protected by property exemptions in Chapter 7.   One Reason to File a Chapter 13 Case Most people who file a Chapter 7 “liquidation” bankruptcy case do not lose anything they own. That’s because everything they own fits within the available “exemptions”—categories of assets, each up to certain dollar amounts, that people filing Chapter 7 are allowed to keep. “Exempt” assets are protected from their creditors, and from their Chapter 7 trustee whose role is to liquidate on behalf of the creditors. So in most consumer Chapter 7 cases there’s…

The Honest Debtor: Why file a Chapter 13 Bankruptcy?

Chapter 13 can save a home, save a business, and help you pay off your debts.  It is a creative and flexible way to deal with your debts.   A Flexible and Powerful Option For consumer and small business owners, a Chapter 13 “adjustment of debts” is a creative and flexible method for dealing with your creditors. It gives you some extraordinary tools, ones that are not available to people using the more common Chapter 7 “straight bankruptcy” procedure. In a Chapter 13 case, you and your attorney propose a debt repayment plan based on your budget. That plan often pays…

The Honest Debtor: Taking out loans before Bankruptcy?

Using credit before filing bankruptcy is a very bad idea. The Golden Rule says no.    The Benefits of Bankruptcy Go to the “Honest but Unfortunate Debtor” As the United States Supreme Court said 80 years ago, the purpose of the bankruptcy laws is that “it gives to the honest but unfortunate debtor… a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.” The “honest debtor” incurs a debt with the intention of repaying it under the agreed upon terms. So a person who uses credit at a time…

The Honest Debtor: Do Both Spouse Have to File Bankruptcy Together?

You can file bankruptcy either with or without your spouse. We look here at reasons either way, and whether they’re legally sound.   The immediate answer to this immediate question is simple—no. A married person can file bankruptcy alone, without his or her spouse. But the real answers to this question depend on the situations in which it’s being asked. Here are some of the most common situations. All or Most Debts in One Spouse’s Name This happens often either in a relatively new marriage or one in which one of the spouses had operated a failing business. The person…

The Honest Debtor: The Role of the “Means Test” in a Chapter 7 “Straight Bankruptcy”

The “means test” is meant to determine if you have the means to pay a meaningful amount to your creditors. It can get very complicated.   What’s the Point of the “Means Test”? A consumer Chapter 7 “straight bankruptcy” case “discharges” (legally writes off) many or sometimes all of your debts, and does so in a matter of only 3 or 4 months. A Chapter 13 “adjustment of debts” case, in contrast, requires you to pay as much as you are reasonably able to pay to your creditors over a 3 to 5 year period. That usually means that all of…

The Honest Debtor: What Information Do I Need to Provide When Filing Bankruptcy?

What needs to be disclosed when you file, what the justification, and is it worth doing so?    The Costs vs. the Benefits Let’s face it: there are certainly some costs that come with the benefits of writing off all or most of your debts and the other protections of the bankruptcy laws. Depending on your attitude about all this, the general frustration and embarrassment of needing to use this legal option is one of the costs. Related to that is the indignity of having to put on paper certain details of your finances. What this “costs” you does depend…

The Honest Debtor: If I Filed a Bankruptcy Once Before But Am Now Again in Serious Financial Trouble, Can I File Again?

It all depends on whether you previously filed under Chapter 7 or 13, and what you are needing to  file  now.   A Fortunate Tool for Your Misfortune No doubt you are un-happy that you need to be thinking about bankruptcy again. We are really sorry that life has been so tough. But when life does give you more than your share of tough breaks it IS good to know that the law gives you another opportunity to get a fresh start. The Timing Rules You most certainly can file another bankruptcy case if you filed another one earlier (or…