Archive for October, 2015

Chapter 7 vs. Chapter 13–Sell Your Home When You Want While Protecting Its Increased Equity

Have the flexibility to sell your home on your schedule and giving time for it to gain value, protecting that value from your creditors.    If you are feeling overwhelmed by debts and wondering if you should file bankruptcy, and if in the midst of this you own a home, you might also be wondering whether you should be selling it. Let’s assume that you’d rather not sell right now, because it’s not the right time for personal or family reasons. Or maybe the home doesn’t have much equity now but its value is increasing and so you think it will…

Chapter 7 vs. Chapter 13–Selling Your Home If You Have Equity but Lots of Other Debts

Protect the equity in your home from your creditors through either of the consumer bankruptcy options.   If you have some equity in your home bankruptcy may enable you to keep that equity—to help your transition into a rental, to buy another home, or to put it into retirement. Today we’ll look at how that works under a Chapter 7 “straight bankruptcy” and then next time under Chapter 13 “adjustment of debts.” Without Bankruptcy If you have some equity in your home and you owe more other debts than you can handle, that equity is likely in jeopardy. Your creditors and…

Chapter 7 vs. Chapter 13–If You Have Too Much Equity in Your Home

Most homeowners’ home equity in Utah is protected by the homestead exemption. If you have too much, protect it with Chapter 13.   The Homestead Exemption Throughout the U.S. people filing bankruptcy have the equity in their homes protected by homestead exemptions. A property exemption in general is the extent to which the law protects something you own, or protects the equity in something you own, from your creditors. Equity is the value of something beyond what you owe on it. If you own a home worth $200,000 and you owe $180,000 on a mortgage, and have no other debts which…

Chapter 7 vs. Chapter 13–Child/Spousal Support Lien on Your Home

One of the biggest differences between these two consumer bankruptcy options are how they help with support arrearage debt.   Support Liens If you are behind on your child or spousal support payments and you own a home, most likely there is a lien on that home for that unpaid support debt. This means that your ex-spouse (or the support enforcement agency in his or her name) may be able to foreclose on your home through that lien. In any event, the lien is a cloud on your title, very likely hurting your credit and potentially jeopardizing your ability to refinance…

Chapter 7 vs. Chapter 13–Second (or Third) Mortgage Strip

Stripping a mortgage from the title to your home could save you a tremendous amount of money.   Two blog posts ago our topic was getting rid of judgment liens, which can be done under either Chapter 7 “straight bankruptcy” or 13 “adjustment of debts.” So if you have a judgment lien (or two) on your home’s title, that will not push you towards one Chapter or the other. But stripping a second mortgage can only be done through Chapter 13. Because stripping a mortgage from your home’s title can save you so much money, it is often the major reason…

Chapter 7 vs. Chapter 13–Property Tax Debt

Solve your property tax problem by writing off your other debts or by buying more time to catch up.     Discharge Your Other Debts with Chapter 7 So You Can Pay Your Property Taxes  If you’ve fallen behind on your property taxes, presumably your income has not been enough to meet your expenses plus payments on your other debts. Sometimes just writing off your other debts would give you enough financial breathing space so that you can catch up on your property taxes. Find out from your attorney how much time you would have to catch up on your property taxes.…

Chapter 7 and Chapter 13–Avoiding Judgment Liens on Your Home in Utah

An underappreciated benefit of filing bankruptcy is that you can usually remove judgment liens from your  Utah home’s title.   In so many ways Chapter 7 “straight bankruptcy” and Chapter 13 “adjustment of debts” are very different, particularly in the tools they each use to help with your home mortgage(s) and other debts related to the home. But the removal, or “avoidance,” of judgment liens is one tool that can be used in either bankruptcy procedure. What is a Judgment Lien? First, a lien is a creditor’s legally enforceable interest in your property. Second, a judgment lien is an involuntary lien…

Chapter 7 and Chapter 13 in Logan Utah — A Utah Home Mortgage Overview

How do these two consumer options help with your Utah home mortgage(s)?   Chapter 7 “Straight Bankruptcy” A Chapter 7 case usually lasts about 3-4 months. It doesn’t reduce your monthly mortgage payment, and doesn’t directly help you deal with your mortgage lender if you’re behind. Instead through Chapter 7 most or all of your other debts are gotten rid of so that you are better able to catch up if you’re behind, and can better afford your mortgage and other home-related debts and expenses overall. Chapter 13 “Adjustment of Debts” A Chapter 13 case usually takes 3 to 5 years.…

Chapter 7 vs. Chapter 13–“Cramdown” on Personal Property Collateral

How does Chapter 13 help you keep (or surrender) collateral on a debt?   Last time we explained the crucial difference between secured and unsecured debts, and focused particularly on “purchase money” secured debts. That led to laying out the advantages Chapter 7 “straight bankruptcy” gives you when dealing with something you bought that is now collateral on the debt you owe. Today we show the often even greater advantages that come under Chapter 13 “adjustment of debts” with this kind of collateral. Creditor Leverage under Chapter 7 We showed last time how under Chapter 7 a secured creditor can require…

Chapter 7 vs. Chapter 13–Personal Property as Purchased Collateral

How does bankruptcy treat something you bought—furniture, an appliance, or some electronics—when that thing is collateral on a debt?   In our last couple blog posts we compared how Chapter 7 “straight bankruptcy” and Chapter 13 “adjustment of debts” each deal with vehicles that are collateral on vehicle loans. Today let’s look at other personal property that you buy on credit where the creditor has the right to repossess the stuff if you don’t pay the debt. Secured and Unsecured Debts We first need to determine whether the creditor really has a right to repossess if you don’t pay. That’s not…