Author: Team Flexsin

Unlike chapter 7 which is a liquidation bankruptcy, chapter 13 involves the reorganization of debts. Student loans are priority debts that cannot be discharged during any bankruptcy chapter unless you can prove hardship. In the case of chapter 13, you can include them with the court’s permission in your repayment plan. Surprisingly, say Dallas based bankruptcy law firm Recovery Law Group many people are unaware that student loans cannot be modified, hence they do not include them. However, these debts can be reduced as well as modified during bankruptcy.

Chapter 13 bankruptcy involves a repayment plan which can include both federal and private loans. Over a period of 3-5 years, you can repay your debts using your disposable income. Any unsecured debts which remain are discharged at the end of the bankruptcy. This is the best option for people who earn more as a result of which cannot qualify for chapter 7 bankruptcy. Since every case is unique, depending on your student loan and your case details, the loan could be included, modified or partially discharged by the court. A bankruptcy attorney can help you either reduce the student loan or modify the same. If you need an experienced bankruptcy attorney you can call 888-297-6023.

Important factors which can help in case of student loan debt discharge or modification

• Good faith

Efforts made by the debtor to negotiate with the loan servicer in good faith make an impression on the bankruptcy judge. With good communication, you can negotiate flexible payment plans with private lenders too. Good communication skills are important for this. You need to report any change in circumstances as well as update paperwork on time to show your commitment towards repaying your debt. Additionally, if the loan servicer has been violating any debt collection laws, you can report it too.

• Standing issues

The loan servicer needs to demonstrate the burden of proof to secure the judgment. This point has been successfully used by many bankruptcy attorneys to ask lenders to prove that they own the debt which they are trying to collect from the debtor. If they lack proper documentation for the proof, the loan cannot be enforced.

• Unfair terms

The student loan has predatory terms that can be challenged by expert bankruptcy lawyers. To make the terms fairer for the borrower, the court might adjust the terms.

Bankruptcy Code

The Bankruptcy Code 11 U.S.C. § 523 (a) (8) is loosely interpreted by federal courts. Most debts do not qualify as student loans and therefore can be exempted from discharge. These include transportation, prep course, computer, internet and living costs during schooling. Bankruptcy code is being amended by the congress to address the student loan debt crisis.

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Unlike chapter 13 where reorganization of debts takes place and a repayment plan is involved, chapter 7 is a no-asset case. However, you can protect some of your property using exemptions provided by state or federal laws. All non-exempt property of the filer is at the disposal of a bankruptcy trustee who can liquidate them to pay your creditors. Lawyers of Los Angeles based bankruptcy law firm Recovery Law Group say chapter 7 bankruptcy is the best way to get financial relief no matter how much the debt provided you can qualify for it.

Who can qualify for chapter 7 bankruptcy?

Debt relief through chapter 7 bankruptcy is available for people having low income. In this case, the monthly income is calculated as an average of the previous 6 months before the bankruptcy filing. If the monthly income is less than the state median income for a household of similar members then you can file for chapter 7 bankruptcy. However, if your income is higher than the state median, you need to pass the means test. This test is used to determine if you have enough disposable money to pay some of your debts. In case you do, you cannot qualify for chapter 7 bankruptcy.

Presumption of abuse will be considered if the amount available to pay creditors (more than 25% of unsecured debt) to be paid in five years is more than $12,850. However, if you can show that due to certain circumstances you won’t be able to pay this, only then you can file for chapter 7 bankruptcy, else the case will either be dismissed or converted into a chapter 13 bankruptcy.

Other requirements that can affect your chapter 7 bankruptcy eligibility are the dismissal of a previously filed bankruptcy case (180 days prior to filing) due to failure to appear or comply or because the debtor voluntarily dismissed the petition. Additionally, you should have attended the mandatory credit counseling course from an approved agency within 180 days prior to a bankruptcy filing.

What do you need to file for chapter 7 bankruptcy?

After filing a petition in bankruptcy court, the debtor must also file the following documents:

• Financial account statement
• List of assets and liabilities
• Schedule for income and expenditures
• Any contracts or unexpired leases
• Proof of any payment received in 60 days prior to a bankruptcy filing
• Credit counseling certificate and copy of repayment plan etched out
• Monthly net income along with any expected increase in either income or expenses
• Any qualified education or tuition accounts the debtor has

Bankruptcy lawyers are your best bet if you wish to get rid of the huge mountain of debts. Call 888-297-6023 to speak with experienced bankruptcy lawyers regarding your options.

Call: 888-297-6203

Any individual, sole proprietor, a self-employed or an unincorporated business owner can file for chapter 13 bankruptcy if they are struggling to pay off a huge amount of debt. Unfortunately, corporations and partnerships do not have the luxury to opt for this option. Unlike chapter 7, chapter 13 has debt limits for qualifying under this bankruptcy chapter. This limit is tied to consumer price index say Los Angeles based bankruptcy law firm Recovery Law Group lawyers. Currently, individuals having an unsecured debt of up to $360,475 and secured debt up to $1,081,400 are eligible to file for chapter 13 bankruptcy. Other important requirements which can affect your chapter 13 eligibility include:

• If within the past 180 days their bankruptcy petition was dismissed due to the inability to appear or comply or if the debtor themselves had voluntarily dismissed the bankruptcy petition.
• Mandatory credit counseling must have been done from an approved agency at least 180 days prior to a bankruptcy filing.

Individual debtors who have regular income can choose to get rid of their debts through chapter 13 bankruptcy by reorganizing their debts and repaying the creditors over a period of 3-5 years. In this case, the debtor makes monthly payments (depending on their disposable income) to the bankruptcy trustee who then disburses them to creditors as per the court-approved repayment plan.

Key requirements of filing for chapter 13 bankruptcy

In the case of chapter 13 bankruptcy, the debtor after filing a bankruptcy petition in the court, also need to file the following documents:

• Current income and expenses
• Any assets and liabilities
• Financial records for a specified period
• Credit counseling proof and copy of repayment plan created during its course
• Any executory contracts and unexpired leases
• Monthly net income and any increase in income or expenses anticipated by the filer
• Any proof of payments received from employer 60 days prior to a bankruptcy filing
• A written record of debtor’s interest in qualified education or tuition accounts

The repayment plan developed in credit counseling is submitted to the bankruptcy trustee and then to the court for approval. The debtor is expected to make plan payments to bankruptcy trustee within 30 days of the bankruptcy filing, irrespective of court approval.

Why choose chapter 13 bankruptcy?

You can protect even your non-exempt property unlike chapter 7 where the non-exempt property is liquidated. You can prevent foreclosure proceedings as chapter 13 allows you to catch up on past payments through the repayment plan. If a bankruptcy filer fails to qualify for chapter 7, they can convert it to a chapter 13 bankruptcy to get rid of their debts. Additionally, unlike chapter 7 bankruptcy which remains on credit report for 10 years, a chapter 13 bankruptcy is mentioned on your credit report for just 7 years. You can know more about chapter 13 bankruptcy by speaking with experienced bankruptcy lawyers at 888-297-6023.

Chapter 7 bankruptcy has no debt limit for individual bankruptcy filers. Thus, any increase in debtor decrease in income is not going to affect your Chapter 7 bankruptcy eligibility. However, say lawyers of Dallas based bankruptcy law firm Recovery Law Group, you are obliged to disclose your finances as well as update them (if there have been any changes) when you file your bankruptcy papers. Chapter 7 requires this more than Chapter 13 as your income is the primary criterion that determines whether you can qualify for this bankruptcy chapter or not.

In case you are filing for bankruptcy and you anticipate any change in income around your bankruptcy filing, you should intimate it to the court. If you have lost your job, you should add this information to the pertinent documents. Once you have filed the papers, check whether the updated information is included in them or not. You will be asked questions related to income changes by the bankruptcy trustee in the 341 hearing or meeting of creditors. This is important as any increase in income might disqualify you from Chapter 7 eligibility.

In case you are amending any document, you should intimate the bankruptcy trustee of the amended schedule. The same holds true for property too. According to Section 1306 of Bankruptcy Code, any property which is purchased after the beginning of bankruptcy case but before it ends, is dismissed or converted should be included as a part of the bankruptcy estate. Additionally, you should also report any inheritance, bonus, or life insurance received. If the debtor does not follow the rules of disclosure, there can be serious repercussions with respect to the bankruptcy case. Any discharge obtained by fraud means can be revoked. Also, if you fail to disclose financial assets, this could lead to criminal prosecution too (for bankruptcy fraud).

Any individual who is filing for Chapter 7 bankruptcy needs to include their statement for current monthly income. If their monthly income is more than the average state median, they have to undergo a means test. This test is used to gauge the ability of the debtor to pay the creditors through their disposable income. Disposable income is calculated by deducting any and every monthly expense essential for surviving like food, clothes, medical, transportation, utilities, taxes, and housing apart from any secured debts (mortgage, car loan) and court-mandated payments like taxes, childcare, alimony, etc. from the monthly income. If your disposable income is enough to make payments towards unsecured creditors your bankruptcy is converted into a Chapter 13 bankruptcy. thus, any change in your income or expenses might affect your bankruptcy chapter. It is therefore important that you consult with expert bankruptcy lawyers. You can call 888-297-6023to to discuss your case with experienced bankruptcy lawyers.