Archive for September, 2015

Chapter 7 vs. 13–Exempt and Not Exempt Assets

Because most of the time everything you own is exempt, it’s protected in a Chapter 7 bankruptcy. Otherwise, Chapter 13 can protect it.   Our last blog post was about keeping or surrendering assets which are security on a secured debt—such as a vehicle on a vehicle loan, a home with a home mortgage, or a household appliance on a secured store credit card or contract. Today we discuss protecting assets that are not encumbered by any debt. So these assets cannot be repossessed by any secured creditor. However, your creditors would have a right to even these unencumbered assets if…

Chapter 7 vs. 13–Encumbered Assets to Keep or to Let Go

Some of your assets are encumbered by debts, and bankruptcy helps you protect or surrender those assets.   Collateral and Other Security on Secured Debts Everything you own is either legally encumbered by a debt or is yours free and clear of any debt. Possessions which are encumbered by a debt can be encumbered voluntarily, such as when you buy on credit. You buy a vehicle and give the vehicle loan creditor a lien on the title. You buy a home and the mortgage lender gets a mortgage on the home. You buy an appliance and give back a security interest…

Chapter 7 vs. Chapter 13

Sometimes it’s obvious which of the two consumer bankruptcy solutions is right for you. But not always. You might be surprised.   7 vs. 13 The two main kinds of consumer bankruptcy are extremely different. Chapter 7 “straight bankruptcy” usually lasts no more than 3 or 4 months. Chapter 13 “adjustment of debts” is seldom completed in less than 3 years and can last as long as 5 years. Chapter 7 focuses on the discharge of debts while Chapter 13 on the payment of (special) debts. Both have trustees involved but in Chapter 7 he or she is a liquidating agent…

Mistakes to Avoid in Utah–Selling Your Home for Being Behind on Property Taxes

Falling behind on property taxes can have serious consequences, but does not necessarily mean you should hurry to sell your home.   Property Tax—the Superior Lien Your local property tax agency usually holds the first lien on your home. That lien comes ahead even of your mortgage. And it’s way ahead of other debts on your home’s title, like creditor judgment liens and IRS and state income tax liens. Your property tax agency can foreclose on and seize your property if you don’t pay the property taxes. And because of its superior position on the title, the property tax agency…

Mistakes to Avoid in Utah–Selling Your Home Because of Owing Income Taxes

If you owe a lot of income taxes and a tax lien has been recorded on your home, it’s understandable to consider selling your home.   This series of blog posts is about how to make better decisions about selling your home when under pressure from your creditors. Some of the biggest pressure can come from the IRS and the state taxing authorities. There are some persistent misconceptions are about how bankruptcy can and can’t help with income taxes and income tax liens. If You Have Income Tax Debt If you owe back income taxes, especially if you owe for a…

Mistakes to Avoid in Utah–Dumping Your Home Because You Can’€™t Afford It

Could you hang onto your home forever, or at least longer, if you didn’t have your other debts or didn’t have to pay the second mortgage?   This series of blog posts is about how to make better decisions about whether to sell your home and when, if you are under pressure from your creditors. If You Really Shouldn’t Be in this House You may in fact need to sell your home if it’s more house than you need, or its cost is way beyond your present financial abilities. Buying this house may have been a mistake that needs to be…

Mistakes to Avoid in Utah–Selling Your Home to Pay Your Ex-Spouse

You may be pleasantly surprised if, before selling your home to pay off your ex-spouse, you first find out your legal options.   The Need to Pay off Your Ex-Spouse Divorce is so often so traumatic. All kinds of emotions can cloud your judgment at the time, and can cloud your memory afterwards. This is true even in a comparatively friendly divorce, and that much more so in a contentious one. So it’s no surprise that after the divorce is over you’re not really clear what legal obligations you have arising from the divorce and what you can do about them.…

Mistakes to Avoid in Utah–Selling Your Home to Avoid Foreclosure

Don’t hurry the sale of your home. It’s often much better to stop a foreclosure through Chapter 7 or 13 and thereby address your whole financial picture.   The last few blog posts in this series has been about how filing bankruptcy can buy you a few more months or even several years, so you don’t have to sell your home when under pressure from your creditors but rather when you’re financially and personally ready. There’s no greater pressure than when you are under threat of foreclosure by your mortgage lender, and especially when the actual date of foreclosure sale is…

Mistakes to Avoid in Utah–Wait until a Better Time to Sell Your Home

Bankruptcy can buy you from a few more months to several years so that you can sell your home when financially and personally ready to do so.   Selling under Pressure If you are being pushed to sell your home quickly because of serious financial pressures, please know that there’s a good chance that there’s a way to get rid of that pressure and sell the home on your own schedule. Selling on somebody else’s schedule is no good. Whether it’s because of an upcoming foreclosure or the threat of one, or because of overall creditor problems, it’s understandable that you…

Mistakes to Avoid in Utah–Do Not Sell Your Home until Stripping the Second Mortgage

Chapter 13 “adjustment of debts” could save you a tremendous amount of money with a second (or third) mortgage strip.   If you have serious financial pressures inducing you to sell your home, is it partly because of your second (or third) mortgage? Would you it help if you did not have to make that payment anymore? Would you be able to keep your home, maybe even permanently, if you could stop paying that second or third mortgage (or both) and also get relief on your other debts? If your home is worth no more than what you owe on your…