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  • Chapter 7 or Chapter 13? Which is Better if Wish to Keep Your Home?

    Chapter 7 or Chapter 13? Which is Better if Wish to Keep Your Home?

    Chapter 7 and Chapter 13 are the preferred routes taken by individuals filing for bankruptcy. Each has specific requirements that you must meet if you wish to get your debts discharged. According to Los Angeles based bankruptcy law firm Recovery Law Group , you need to be current on your payments and protect all home equity through bankruptcy exemptions in the case of Chapter 7. While in Chapter 13, you get a chance to catch up on missed mortgage payments through arrearage in the repayment plan.

    Both state and federal government offer exemptions to protect your equity in the property when you file for bankruptcy. You might be able to choose between either of those options or make the best of the state exemptions. Before filing for bankruptcy, it is important to consult expert lawyers to know which chapter of bankruptcy will result in saving more property. Call 888-297-6023 to clear your doubts regarding exempt property and bankruptcy. The exemptions vary from state to state. In the case of chapter 7 bankruptcy, any non-exempt property will be sold, and the proceeds distributed among your creditors by the bankruptcy trustee. Chapter 13 bankruptcy allows you to keep your non-exempt property if you pay your creditors an amount equal to the amount of non-exempt property you are keeping. This proves to be costly and will not be approved unless you can show you have enough disposable income to repair creditors.

    Chapter 7 Bankruptcy

    Chapter 7 bankruptcy allows you to get rid of unsecured debts relatively quickly. In most cases, people can protect their exempt property and have to let go home a small amount of non-exempt property. You can keep your home in this case of bankruptcy if:

    • you are current on your mortgage payments;
    • bankruptcy exemption protects your entire home equity;
    • you can afford to make payments on the loan in the future

    However, this chapter does not allow you to catch up on past due payments. In case you have a lot of equity in the house, it is difficult to protect it from being sold by the bankruptcy trustee to repay your creditors.

    Chapter 13 Bankruptcy

    This is a better option if you wish to keep your home when you have a lot of equity and have previous due payments to catch up on. Incidentally, it also helps in getting rid of second or third mortgages. This involves a repayment plan through which you can pay back your creditors over 3 to 5 years’ time frame. You could also ensure that a separate debt is added to the repayment plan which addresses your mortgage arrearage. You need to show that you have enough income to make regular mortgage payments along with your plan payments during bankruptcy.

    Chapter 13 also prevents creditor to take any foreclosure action on the mortgage as long as you are making regular payments as per your repayment plan. Lien stripping helps you get rid of any junior lien on your home in case of Chapter 13 bankruptcy Los Angeles. This takes place only in case the property is now worth less than the balance of the primary loan. evidence pertaining to this if submitted bankruptcy court might make any junior lien void. Any debt owed to that creditor is treated as unsecured debt and is wiped out along with other similar debts at the end of your bankruptcy case.


      *Are you more than 60 days past due on your mortgage?

      *Do you own a home?

      Are you currently working?

      By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.

    • Chapter 7 Bankruptcy and Medical Debt

      Considering the rampant spread of diseases across the world, having health insurance is mandatory. However, despite the assurance of insurance, people still end up accumulating a huge amount of medical debt. Getting rid of the unsurmountable medical debt is a reason why many people file for bankruptcy. However, the fate of any debt during bankruptcy depends on which kind of debt it is, say lawyers of Los Angeles based bankruptcy law firm Recovery Law Group.

      Debts are classified broadly into four categories:

      • Secured debts

      If the creditor has a lien on your property, such as home or car, and can foreclose or repossess the said property in case of non-payment of dues, then, the debt is known as, secured debts. In this case, the property acts as collateral. Examples include car loan and mortgages.

      • Unsecured debts

      Any debt which is not secured, by a property is termed as unsecured debt.

      • Priority debts

      Priority debts are non-dischargeable, i.e. they are not wiped off during bankruptcy. These include domestic support (child support or alimony) and certain taxes owed to the government. Priority debts are also unsecured but cannot be discharged during bankruptcy.

      • Nonpriority unsecured debts

      These debts are generally the last to be paid in a Chapter 7 bankruptcy. Most of these debts, apart from a student loan, are discharged without repayment in bankruptcy. Example of such debts is credit card, medical debts, and unsecured personal loan.

      What happens to medical debt in Chapter 7 bankruptcy?

      Medical debts are nonpriority unsecured debts and treated accordingly. In the case of Chapter 7 bankruptcy Dallas, your bankruptcy trustee uses your non-exempt property to pay off your creditors. The payment is made first towards your secured debts, then your priority debts and finally towards nonpriority, unsecured debts. Any remaining unsecured debts are discharged in Chapter 7 bankruptcy. It is thus, the best option to get rid of a large amount of unsecured nonpriority debts. However, qualifying for Chapter 7 bankruptcy is difficult. You need to pass the disposable income means test, i.e. your income must be less than the average income of a household of similar strength in your state. This chapter of bankruptcy is not ideal for debtors who have a significant amount of non-exempt property as that will be sold off to repay your loans. It is therefore important to contact expert bankruptcy lawyers at 888-297-6023 to know whether Chapter 7 bankruptcy is ideal to get rid of medical debts in your case.


        *Are you more than 60 days past due on your mortgage?

        *Do you own a home?

        Are you currently working?

        By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.

      • Common Avoidable Mistakes for Chapter 7 Means Test

        Common Avoidable Mistakes for Chapter 7 Means Test

        A Means test is an eligibility test that is carried to assess the eligibility for Chapter 7 bankruptcy. However, means test is not one of the simplest tests to carry out, which creates possibilities of multiple errors. Some of them could be avoided and the eligibility for Chapter 7 can be made much easier. To learn more about Chapter 7, eligibility, alternatives, and best attorneys in your town to help you deal with this financial crisis, log on to Recovery Law Group . Some quite common avoidable errors can be listed as follows-

        Do you really need to take the Means test?

        It is important to first assess, whether doing all the calculation and adjustment for ‘means test’ is really worth or not. There are two situations wherein the means test becomes unnecessary. In the first scenario, your income is way below that state median and there is no need to go ahead with the means test as it automatically qualifies you for Chapter 7. The second scenario is when your income is too high and taking some standard expense deductions based on state rule book would not help. Under both scenarios, you would not want to make unnecessary calculations with respect to the means test as you either directly qualify or disqualify.

        Are you filing a business bankruptcy?

        In bankruptcy terms, there are two types one is business and the other is a consumer. Consumer bankruptcy refers to the loan taken for personal purposes and not intended to be used for business purposes. If you have a combination of loans which is business as well as personal, the percentage of loans will determine whether it is a consumer or a business bankruptcy. If the business loans exceed the personal loans by some margin, it can be referred to as a business bankruptcy. If the personal loans are higher or if the business loans are marginally higher than personal loans, it will be referred to as a consumer bankruptcy.

        It is essential to understand this distinction as there is no need for a ‘means or median’ test if it is a business bankruptcy. Many people do the ‘means test’ with their business transactions and struggle while that might not be required at all. Similarly, people with some business loan skip means test only to realize, they might be subject to it.

        Determining the household size

        Coming up with the household size for comparing state median or for calculating some of the expenses for ‘means test’ can be a challenge. It is not as easy as it looks. While some courts allow for all individuals in the household unless and until their income is accounted for and their part or full responsibility of the household members on the bankruptcy filer. On the other hand, some courts allow for a household count of people who are dependent on the bankruptcy filer financially. Arriving at the right household size can prove challenging sometimes. It is always a better approach to opt for a household count of people who are directly financially dependent on the filer.

        Income mismatch and duplication

        The income to be reported in the court with the bankruptcy filing application has to be used in the same capacity for the means test. People tend to use their recent monthly income instead of the average six months of income from the bankruptcy filed date. It can also happen that a married filing joint couple might end up including a spouse’s income even if the spouse isn’t filing for bankruptcy in his/her individual capacity. This can lead to an unnecessary hike in income. Similarly, accounting for double expenses when the spouse isn’t filing for bankruptcy is also not acceptable by the court.

        Child Support

        There can be scenarios that child support is paid out in the form of food items, clothing, and other essentials of the child. Since the child support is not being received as cash, it may not be reported as income. If you are a bankruptcy filer, paying for child support, it can be included as an expense.

        Mortgage payments and Standard Housing Deduction

        The common practice is to include both standard housing deduction and mortgage payment (as an adjustment in the following line). However, under Chapter 7, the assets might be liquidated. Hence, if you are giving away your home, you are not allowed to use mortgage payments in the expense column. You shall only be eligible for the standard housing deduction. The approach may vary based on courts and it is best to have a consultation with the attorney regarding this.

        Allowable and non-allowable deductions

        Determining what deductions are allowable and not allowable depend on different circumstances. It has often come to notice of people missing out on certain allowable deductions and opting for deductions which they aren’t eligible for. This can be best addressed by reaching out to an experienced bankruptcy attorney. The number is 888-297-6203. Don’t wait, dial in right now!

      • Automatic Stay – Way to Stop Your Creditors

        Automatic Stay – Way to Stop Your Creditors

        One of the best advantages that bankruptcy can offer debtors is an automatic stay. this puts an immediate end to all collection actions and any civil lawsuit filed against you by the creditors, government or collection agencies. The upside of the automatic stay as per Los Angeles based bankruptcy law firm Recovery Law Group  is that it can help you prevent being evicted or protect your property from being repossessed or foreclosed on, utilities being disconnected or wage garnishment. For more information on automatic stay, call 888-297-6023 and speak with expert bankruptcy lawyers.

        What can automatic stay prevent?

        The automatic stay can come in handy in several emergencies like:

        • Utility bills. In case you are behind on utilities like water, gas, telephone or electricity and face disconnection, the automatic stay can prevent it for a minimum of 20 days. however, you need to pay a deposit to ensure future payment.
        • Foreclosure. The automatic stay prevents the proceedings of foreclosure. You can catch up on past payments in the Chapter 13 repayment plan if you wish to keep your home. However, if you are behind on your payments in a chapter 7 bankruptcy case, an automatic stay is a temporary relief.
        • If the landlord has a judgment against you, or they allege you are endangering the property then automatic stay cannot help. In other cases, the automatic stay may provide temporary relief, however, the landlord might ask the court to lift the stay and allow eviction.
        • Wage garnishments. the automatic stay puts an end to collection actions like this. You can discharge qualifying debt like credit card or personal loan dues. However, alimony and child support debts cannot be discharged. Priority unsecured debts are dealt with differently in different bankruptcy chapters.
        • Overpayment of public benefits. The agency is entitled to collect any overpayment made from future checks or from you directly. The automatic stay prevents the collection but does not prevent the agency from terminating benefits.

        In what circumstances automatic stay is not of much help?

        An automatic stay cannot help you in some cases like:

        • Tax proceedings. IRS can audit you, issue tax deficiency notice and tax assessment, demand tax return or payment of assessment despite the automatic stay. However, there can be a temporary pause to issue of tax lien by IRS or seizing your income or property. The taxes could get discharged in Chapter 7 bankruptcy Dallas, or you might end up paying the debt in Chapter 13.
        • No respite from legal actions. A lawsuit for paternity establishment, modification or collection of spousal or child support won’t be stopped. Similarly, any criminal proceeding against you (sentence, paying fine, community service, ) won’t be stopped by the automatic stay.
        • A loan from the pension. Money can still be withheld from your income despite automatic stay to repay loans from some pensions like IRAs and job-related ones.
        • Numerous filings. In case you have a pending bankruptcy case from the previous year, the automatic stay lasts only for 30 days unless the creditor or the trustee asks for its continuation. In case any creditor files for a motion to lift the automatic stay, you will need to prove that the bankruptcy case was filed in good faith and the automatic stay protection should continue.

        Can creditors resume collection action?

        Creditors can ask the court to lift the automatic stay sanction by filing a motion in bankruptcy court. This is generally done in case of a foreclosure, tenant/landlord dispute or a lawsuit in a different court. If the creditor can show that they will lose money with automatic stay in place and no benefit/harm will come to other creditors, the court might agree.


          *Are you more than 60 days past due on your mortgage?

          *Do you own a home?

          Are you currently working?

          By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.

        • Are There Alternatives to Bankruptcy?

          Are There Alternatives to Bankruptcy?

          When faced with huge financial problems, people often resort to filing for bankruptcy. Undoubtedly, it offers great respite for people, especially when it comes to harassing collection actions from the creditors. However, bankruptcy can negatively affect your credit report. According to Dallas based bankruptcy law firm Recovery Law Group, there a number of other viable options are also available for people struggling with debt. To know more about them you can call 888-297-6023 and speak with expert bankruptcy lawyers.

          The alternate options depend largely on what your primary objective for filing bankruptcy is. If you wish to get respite from the harassing collection actions of creditors, you could opt for state and federal debt collection laws. Alternately, if you have some assets which you are willing to part with, you can negotiate with your creditors. Paying them some money from selling dispensable assets can buy you some time and goodwill from the creditors. You might even be able to settle your debts at less than what you owe. If, however, you are not so great with negotiations, you could seek help from non-profit debt or credit counseling agencies. You can find a state-wise list of the approved credit counseling agencies which are United States Trustee approved as completion of the course is mandatory for debtors prior to a bankruptcy filing.

          Debt counseling

          The credit counseling agency has a debt management program which is like the repayment plan in Chapter 13 bankruptcy Dallas. The advantage of choosing it over bankruptcy is that no record of debt management appears on the credit record. Having a bankruptcy on your credit record can affect your chances of getting a loan, credit cards, and even job prospects. However, opting for the program has some demerits too:

          • The automatic stay in bankruptcy protects collection actions, even if you miss a payment. There is no such provision in the debt management program.
          • You are required to pay your debts in full in case of debt management while you can pay a fraction of your unsecured debts during Chapter 13 and the remaining debts get discharged at the end of your repayment plan.
          • Many debt management and settlement companies are in the business of collecting fees for their services and may cause you more harm than benefit.
          • There have been instances of scams reported, where such companies receive funds from creditors and there might exist a conflict of interest in such cases.

          If you are “judgment proof” i.e. have little income and property, you can continue to remain in debt without filing for bankruptcy or seeking any other recourse. Since you have limited property and meager income, any creditor trying to collect from you will be able to get nothing. Unless you draw attention to yourself by refusing to pay government taxes, or spousal or child support, you cannot be thrown in prison for your inability to pay your debts. Moreover, essentials like clothing, personal effects, household furnishings, food or social security, public assistance or unemployment benefits cannot be taken by the creditor.


            *Are you more than 60 days past due on your mortgage?

            *Do you own a home?

            Are you currently working?

            By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.

          • Chapter 7 bankruptcy: An Assessment of Cost and Debt Discharge

            Chapter 7 bankruptcy: An Assessment of Cost and Debt Discharge

            If there is too much debt piled up, the only option available might be to file for bankruptcy. Before filing for bankruptcy, it will be worthy to find out what could be an estimated cost and what would be some of the debts that you could get rid off by filing for bankruptcy versus by not filing. Most of the stats indicated below are availed from reader’s surveys. To know more statistical information and technical aspects of bankruptcy, log on to Recovery Law Group.

            Attorney fees

            Keeping everything aside, the most difficult and common question to answer is how much would an attorney charge for a Chapter 7 bankruptcy? The question is difficult to address because there are so many factors leading to the attorney fees. Most readers also ask if the attorney is really essential. Well, as per 95% of the bankruptcy filers think attorney just eased the process of bankruptcy for them. A good number of people as per survey offered a flat fee of under $1,500 to their attorneys, while some found attorneys who charged $700 and $2,500 based on the complexity of their situation. It would not be a bad start to set aside $1,500 as an estimate for attorney fees.

            Other Administrative costs

            A filing fee of approximately $335 is levied for bankruptcy filers. This fee can be waived off under rare circumstances when the filer’s income is low or negligible. Apart from this, the filer is required to attend two financial counseling courses. An estimated cost for this would be about $60 per course. This inches the total cost for filing bankruptcy to about $450 and thereabouts.

            What is the average release percentage for each debt?

            It can be very enlightening to note the average debt release percentage based on the category of debt. This gives a clear hint if you should opt for Chapter 7 or not. If you possess debt which has the highest percentage, you should opt for Chapter 7 if not you need to reconsider your options.

            Credit Card debt – As per stats in 98% of cases, such debt was fully discharged. While in 1% cases, the debt was partially released. There is a 1% chance that your credit card debt shall not be discharged. So, if your financial position is worst because of credit card debt, Chapter 7 is the best alternative to you.

            Medical bills – Stats confirm a full discharge in 95% of the cases, a partial discharge in 4% cases and no discharge in 1% cases. Just like credit card debts, medical debts are debts which can be discharged almost fully in most cases. A similar trend could be associated with business debts, utility payment arrears, and phone bills.

            Taxes – This is one of the debts which is usually not discharged or released. However, stats say in 35% cases, filers received a full discharge of tax debts. Also, 26% of filers got a partial waiver for the taxes. Overall, a total of 61% received some rebate in taxes due because of Chapter 7 bankruptcy filing.

            Student loans – Student loans and taxes are some non-dischargeable debts. These debts are released only when ‘undue hardship’ is proven. This is a scenario when an individual will not be able to pay the debt in the present and in the near future due to very poor financial condition. Good 9% of cases received a complete discharge of student loans, while 6% of the filers received a partial discharge.

            For releasing taxes debt and student loans, you will definitely need a very good attorney. It is not impossible, but it is very tough to get those loans released. A dial to 888-297-6203 might just help you find the right one.

            Home mortgage – A Home mortgage is a common worry, unlike credit card and medical bills, only about 68% were able to retain their homes after Chapter 7 bankruptcy California. Most people cite losing their home after Chapter 7, this stat just emphasizes the same issue. However, under most circumstances, if you have paid most of your home equity or are current with your home mortgage, saving your home can be easy.

            Automobile loan – The percentage for the automobile is slightly higher to 87% which is more than a relief. If you own a basic car which is not ultra-expensive or luxurious, it is possible to box it in the exempt asset category.

            Time factor – Chapter 7 is probably the fastest when it comes to wrapping up debt and leading you into a fresh financial zone. Good 90% of people got the process completed in less than 6 months, with 53% filers able to wrap it in under 3 months. Only 10% of cases took over 6 months. This makes Chapter 7 a great option if you want to wrap up this ugly chapter of your life to the earliest.


              *Are you more than 60 days past due on your mortgage?

              *Do you own a home?

              Are you currently working?

              By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.

            • Which Debts Survive Chapter 13 Bankruptcy?

              Which Debts Survive Chapter 13 Bankruptcy?

              People often opt for bankruptcy to get control over the spiraling debts they have accumulated over a period. While in case of Chapter 7, your non-exempt property is liquidated to pay off your creditors and any remaining unsecured debts are discharged; Chapter 13 helps you to reorganize your debts and make payments towards them over a period of 3 to 5-years’ time. Your unsecured nonpriority debts are paid off through the repayment plan and any subsequent debts are discharged at the end of the period. Los Angeles based bankruptcy law firm Recovery Law Group, lawyers inform that there are certain nonpriority, unsecured debts which are not discharged even after bankruptcy. To know more about your case, and debts remaining after bankruptcy call 888-297-6023.

              Some of the debts which can survive Chapter 13 bankruptcy include:

              Domestic support obligations

              This debt is compulsory and cannot be discharged, neither in Chapter 7 not in Chapter 13 bankruptcy. You must ensure that you make 100% repayment on child and ex-spouse support during the course of your repayment plan and even after that.

              Criminal penalties

              Any fines you owe due to any convictions for crimes you committed (including traffic ticket) cannot be discharged, even in case of Chapter 13 bankruptcy.

              Fines owed to government agencies

              Any fines that you owe the government, or you have been subjected to penalty, such debts are not discharged. However, in case the government agency calculates the fine due to you being overpaid benefits or your failure to inform about the income, then the amount overpaid is dischargeable like unsecured debts. The fine itself is not dischargeable.

              Certain taxes

              Income tax debts which were due within the 3-year period prior to bankruptcy filing date are priority debts which do not get discharged even if your bankruptcy ends abruptly. Any tax debts which remain post ending of your bankruptcy need to be paid outside of bankruptcy. Alternately, you could get your Chapter 13 bankruptcy converted to Chapter 7.

              Debts due to DUI

              DUI is a punishable offense. In case you injure or cause the death of any person while driving under influence, the debts so arising are not dischargeable. It is important to remember that any debts arising due to personal injuries caused due to drunk driving are not dischargeable, but any property damage caused due to driving under influence is dischargeable.

              Debts due to willful or malicious intent

              Debts arising due to any willful and malicious act which results in personal injury are non-dischargeable. In case a creditor obtains a judgment in civil court against you, the debts won’t be discharged. Unlike Chapter 7 bankruptcy, which discharges reckless driving debts, Chapter 13 does not allow this. However, Chapter 13 includes debts arising due to personal injury or death only, and not damage to personal property, as is the case with Chapter 7.

              Student loan

              Unless you can prove substantial hardship, student loans do not get discharged during bankruptcy. However, you might get a discharge on the interest on student loans in some cases but not on the principal amount.

              Fraudulent loan

              Any debt obtained due to theft or fraud cannot be discharged during Chapter 13 bankruptcy California. Such debts are only discharged if the creditor is unable to establish the fraud in bankruptcy court.

              Creditors you forgot to list

              When you file for bankruptcy, you are required to list all your debts and creditors on the papers. The court then uses this comprehensive list to contact your creditors to inform them of your bankruptcy. If the creditor is aware of your debts and the debt is dischargeable, then the debt will be discharged. However, in case any creditor is not listed on bankruptcy papers or has shifted residence and gets no notice of your bankruptcy, those debts will survive bankruptcy.

            • Which Debts Need to be Paid in Chapter 13 Bankruptcy?

              Which Debts Need to be Paid in Chapter 13 Bankruptcy?

              When you file for bankruptcy, all debts are not supposed to be paid in a similar fashion in Chapter 13 bankruptcy case. According to Los Angeles based bankruptcy law firm Recovery Law Group, the amount you need to pay depends on whether the claim is a secured, priority or an unsecured claim. In case you are confused regarding the aspects of bankruptcy, contact with expert bankruptcy lawyers at 888-297-6023 to clear your doubts.

              Secured claims

              Those debts in which the creditor has collateral, These include car loans and mortgages. Payments of the secured loan depend on how long the loan has been taken; is your loan underwater and the rules of the court. Non-payment of debt in case of a secured loan will result in the creditors collecting the collateral and selling it to clear the debt. Filing for Chapter 13 bankruptcy can help you protect your property if you stay current on our payments and pay off any arrearages during your repayment plan. Some important points to remember are:

              • In case your payments are intended to last longer than the repayment plan (as in the case of mortgages), you are not required to clear the debt in
              • You have the option of cramdown where you can reduce the payment of your car or any other property to the current market rate.
              • A second or third mortgage can be wiped out by stripping the lien.
              • You can also catch up on arrearages through the repayment plan.

              In case of mortgage debts, you need to make monthly payments over the period of your repayment plan and even after the case ends, depending on how long the secured debt was taken for. If you are behind your payments, you can catch up through the repayment plan. You need to pay the arrears and the interest you incurred over the period of your repayment plan.

              Any past due to property tax can be repaid with full interest over the period of your Chapter 13 repayment plan. Similarly, you can use the repayment plan to catch up on your car loan. You need to pay the entire balance before your repayment plan ends. You can ask for a cramdown of your car loan to the amount the vehicle is currently worth if you had purchased the car 910 days prior to a bankruptcy filing. You end up paying the market value of the car along with the interest through the plan. Any remaining due is treated as unsecured debt.

              Unsecured claims

              These types of claims do not have collateral attached and hence the creditor cannot take any property if you cease to make payments on the loan. Unsecured claims are of two kinds:

              • Priority unsecured claims

              There is no collateral involved but they are prioritized over non priority unsecured claims when it comes to paying debts. These claims are not discharged during bankruptcy and you need to make payments towards them throughout the Chapter 13 repayment plan. These debts include any recent income tax debts, past due child or spousal and administrative expenses.

              • Nonpriority unsecured claims

              Any claim which does not fall in the above categories constitutes a non priority unsecured debt. These include personal loans, credit card debts, medical bills, and utilities. A percentage pro rata share of your disposable income or the value of your exempt property (whichever is higher) is used to pay for your unsecured claims. In most cases of Chapter 13 bankruptcy Dallas, a small portion of the unsecured debt is paid, and the remaining is discharged.


                *Are you more than 60 days past due on your mortgage?

                *Do you own a home?

                Are you currently working?

                By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.

              • When is Chapter 13 More Advantageous Than Chapter 7?

                When is Chapter 13 More Advantageous Than Chapter 7?

                The common tendency of bankruptcy filers is to believe that Chapter 7 is better than Chapter 13. Yes, Chapter 7 has many benefits, but it can outrightly not be regarded as the best alternative compared to Chapter 13. There are many scenarios when Chapter 13 can prove more advantageous than Chapter 7. Every bankruptcy chapter has some or the other benefits and flaws. To learn more about all the Chapters and their technicalities log on to Recovery Law Group. Some of the Chapter 13 benefits over Chapter 7 can be listed as follows-

                • When you are not eligible for Chapter 7

                If you fail to be eligible for Chapter 7, well the only option available could be Chapter 13. In that scenario, Chapter 13 is beneficial. In other words, it is easier to qualify for Chapter 13 than Chapter 7. There is a median test as well as a means test to be eligible for Chapter 13. The calculation can become slightly intriguing but the straightforward debt thresholds for Chapter 13 make it a lot easier to determine if you qualify for Chapter 13 or not.

                • Safeguarding your car and other important assets

                Even if you are eligible for Chapter 7 after undergoing the complicated calculations, applying through Chapter 13 might still be a better option. If you are running behind the payment schedules of your car mortgage, you get to keep your car as well accommodate the payment of the arrears in the proposed payment plan over the next three to five years.

                • Managing the priority and non-releasable debts

                If you have a larger portion of debts that cannot be released, Chapter 13 is the right option for you. Child support, alimony, tax debts, etc., are a few examples of non-releasable debts. If your debt constitutes of a good portion of these debts, then Chapter 13 is a very good option. You get sufficient time period of 3-5 years to pay off these non-releasable debts, while you end up without assets as well as liable to these non-releasable debts with Chapter 7 bankruptcy code Dallas.

                • Time is all that you need

                Sometimes, people come across a stage when nothing is working well for them and it is usually all about time. A relaxed phase of 2-3 months can put you back on track with your finances and help you pay off all your dues. This time is very difficult to get especially when you are falling behind several payments across lenders. If you have a steady flow of income and time is all you need to pay off your debts, Chapter 13 can help you close most your debts as well keep all your assets intact. This is possible due to a phenomenon called ‘automatic stay’ which is applied as soon as you apply for bankruptcy. Some salient features of ‘automatic stay’ can be listed as follows-

                1. The lender cannot garnish your wages, or withdraw your cheque, funds from the bank account or make such request to your bank
                2. The creditor cannot repossess your secured loan assets like a car or jewelry, or any other asset kept as collateral
                3. The lender cannot foreclose a home mortgage either
                4. The creditor cannot initiate any suit against you for defaulting payments

                 

                • If your tally of a nonexempt asset includes an asset you had like to keep

                If you have a nonexempt asset which shall be liquidated during the course of Chapter 7 bankruptcy procedure, Chapter 13 becomes an obvious choice to safeguard your asset as none of the assets are repossessed or liquidated under the Chapter 13 bankruptcy.

                • To relieve you co-debtor

                If there is any guarantor for any of your debts, the co-signer or co-debtor can have all the possible troubles of recovery with Chapter 7 bankruptcy. The filer is safe, but the guarantor or co-debtor isn’t. The lenders will go after the guarantor to recover as much of dues as possible. This could be very disturbing for the co-debtor. With Chapter 13, there is no such hook on the co-debtor since you have proposed to payout most of the debts in the next 3-5 years.

                To know more about Chapter 13 and Chapter 7 technicalities, formalities, applying details and to discuss what is best in your case, call us now at 888-297-6203.


                  *Are you more than 60 days past due on your mortgage?

                  *Do you own a home?

                  Are you currently working?

                  By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.

                • What happens to Your Vehicle in Chapter 13 Bankruptcy?

                  What happens to Your Vehicle in Chapter 13 Bankruptcy?

                  Chapter 13 bankruptcy allows you to catch up on previous dues and make arrangements to clear your secured, priority and unsecured debts through a repayment plan. Unlike Chapter 7, you can keep all your property in Chapter 13 bankruptcy if you pay your unsecured creditors the amount of non-exempt property you are keeping. This chapter of bankruptcy, say lawyers of Los Angeles based bankruptcy law firm Recovery Law Group, can help you catch up on mortgage and car loan payments and also help in reducing the amount owed in the latter case.

                  Sometimes, even Chapter 13 bankruptcy might not help you with keeping your vehicle; and it might be wise to let go, especially if the non-exempt equity in the car is too much. The bankruptcy exemptions allow you a certain amount of equity in a vehicle. In case you have two vehicles or have a vehicle with exceptionally high car payments (luxury vehicle), then keeping it during bankruptcy would be foolhardy. If you wish to know more about keeping your vehicle during bankruptcy, you can consult with expert bankruptcy lawyers at 888-297-6023.

                  Can Chapter 13 bankruptcy help with your vehicle?

                  Chapter 13 helps bankruptcy filers who wish to keep their property, the primary benefit is automatic stay which prevents repossession of the vehicle in case you have fallen behind on payments. When you file for bankruptcy, the automatic stay provision stops all collection actions including foreclosure and repossession. What’s more, if a lender has already repossessed your vehicle, you might get it back if you file for bankruptcy!

                  Chapter 13 also offers you a chance to catch up on previous payments. You can be in the good books of the creditor if you pay for the arrearage (the amount you are behind on car loan) along with regular car loan payments through the Chapter 13 repayment plan. If you continue making these payments during the course of your bankruptcy chapter, the lender cannot repossess your car.

                  You might even reduce your car loan by cramdown. This facility is available for vehicles purchased 2.5 years prior to a bankruptcy filing. If the value of the vehicle is less than the amount due, you might be able to get the loan amount reduced in the case of Chapter 13 bankruptcy Los Angeles. Any remaining amount is treated as an unsecured debt; paid using your disposable income (the amount left after taking care of your monthly expenses and paying secured and priority debt). Unsecured debts are discharged at the end of the repayment plan.

                  What to do if you wish to keep your vehicle?

                  Chapter 13 allows you to keep the non-exempt property as long as your creditors are getting adequately compensated through the repayment plan. Apart from your monthly expenses including any mortgage or car loan payments, the disposable income will be used to pay off the creditors of your unsecured debts through a 3 to a 5-year repayment plan. This shall include the value of the non-exempt property which you intend to keep. Any creditor who thinks they are not getting their due can file an objection to the plan, which may derail the entire bankruptcy process.

                  Keeping a car which, you cannot afford is being foolish and stubborn. Chapter 13 lets you surrender any vehicle on which you cannot make timely payments and that will require huge loads of money for repair. You will reduce the debt burden by letting go of such a vehicle. The court also does not look kindly to people using funds in a misappropriate manner, paying for excessively high car payments instead of paying the creditors’ their dues.


                    *Are you more than 60 days past due on your mortgage?

                    *Do you own a home?

                    Are you currently working?

                    By clicking “Submit”, whether I do or do not purchase any products or services on this website, I hereby give my express written consent to receive calls and SMS/text messages, including calls and SMS/text messages made and sent using automated dialing equipment and/or pre-recorded or artificial voice technology and email, about offers and deals that I wish to be kept informed about from (“Partners”), at the phone number and/or email address provided on this form, including any wireless numbers provided, even if I have previously registered the provided number on any Do Not Call Registry. If I do not make a purchase on this website, it is expressly understood that the Partners retain permission to contact me as specified earlier in this paragraph. Carrier SMS/MMS and data messaging rates apply. I also agree that by clicking “Submit” that I agree to the Privacy Policy and Terms and Conditions.