Author: Team Flexsin

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Imagine, you have not paid the rent to your landlord since past few months, and now your landlord wants to evict you from his property. When the landlord handed you the eviction notice, you offered to pay the late rent (you just got it from a friend who owed it to you), but he asked you to pay an extra $900 to cover the lawyer’s fee, too. According to you, the lawyer didn’t do any work, so you refused to pay that extra amount. Now, in order to stop the landlord from going ahead with the eviction trial, you’ve filed for a Chapter 13 bankruptcy. Will that stop your eviction?

Going ahead with a Chapter 13 bankruptcy, in this case, can force reinstatement of the defaulted lease, but the disadvantage is that you’ll have to pay the complete amount which you owe to the landlord, along with his and your court costs.

Another drawback of filing for Chapter 13 bankruptcy can be that you won’t be allowed to represent yourself in the court. There are less than 1% chances of getting a Chapter 13 bankruptcy approved without an attorney, even if a bankruptcy petition preparer gives you self-help services. Thus, it will be important for you to hire an attorney for yourself which can be really expensive, as most of the bankruptcy lawyers charge around $4,000 for a Chapter 13 bankruptcy case.

The best way to come out of such a situation will be to make peace with the landlord outside the bankruptcy court. It will be comparatively easier for you to convince the landlord, as he’ll be aware that it’ll be almost impossible for him to get any money from you after the eviction. Also, the landlord will also lose added money in the search for a new tenant.

Is It Possible to Discharge a Previously Discharged Chapter 7 Bankruptcy Debt in Chapter 13 Bankruptcy?

Yes, you can discharge your debt in a Chapter 13 bankruptcy, only if you file for it more than four years after the date, on which you had previously filed for a Chapter 7 bankruptcy for the same debt. In case you filed for Chapter 13 bankruptcy in less than four years, you won’t be able to get a discharge. However, you can file for Chapter 13 bankruptcy for the same debt, if you want to, and make payments for it under a repayment plan.

Landing in such a type of situation can be extremely dangerous and thus, it’s necessary to take legal advice from competent attorneys, which you can easily find at https://www.staging.recoverylawgroup.com/. You can also contact them at 888-297-6203.

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Despite what you have read or heard, bankruptcy might not always be the best way to get rid of debts, say, lawyers of Dallas based bankruptcy law firm https://www.staging.recoverylawgroup.com/. Though there are numerous instances when Chapter 13 bankruptcy plan has worked for the greater good of the debtor, there are some instances when filing for Chapter 13 bankruptcy might not be the best move. For instance, a client who is already five years into debt consolidation pays $400 per month with a remaining balance of $3,500. His home is worth $300,000 while he owes $325,000 on his 1st mortgage while $58,000 on his 2nd mortgage. He is current on his second mortgage which has a monthly payment of $600. Since the client makes $100,000 per year and lives frugally, filing for chapter 13 bankruptcy would not be the best way to get rid of debts.

Though bankruptcy will get rid of your 2nd mortgage and turn it into an unsecured claim, you will have to put all your disposable income into the Chapter 13 repayment plan for a period of 60 months. Currently, the client is paying $1,000 ($400 for consolidation debt and $600 for 2nd mortgage); thus Chapter 13 repayment plan will involve a sum of at least $1,000 per month. Since the debtor is living within their means, they might even up the disposable income. Over the duration of the repayment plan, they will end up clearing their debts in full including the 2nd mortgage. Thus, the advantage of opting for a Chapter 13 bankruptcy is that you end up repaying all your debts without paying any more interest. When it comes to the disadvantages of opting for Chapter 13 bankruptcy, in this case, there are quite a few. Filing for bankruptcy will include:

• Attorney fees ($4,000) for a basic chapter 13 case
• Attorney’s fees to strip off the lien ($1,500)
• Court filing fees $281
• $200 for real estate appraisal
• Bankruptcy trustee’s fees $6,000
• Compulsory credit counseling fees $25

I.e. you will end up paying nearly $12,000 for filing Chapter 13 bankruptcy case. This will eliminate any savings you would have made on getting rid of the interest on your debts. Additionally, entering Chapter 13 bankruptcy will put you 5 years behind on getting on a path to credit recovery. Since the debtor was already in a debt consolidation plan for 5 years, this would mean getting 10 years behind. In this situation, working on the consolidation program to get rid of your debts will be the best way. Once that is removed, you can get rid of the 2nd mortgage. To get excellent consulting advice, you can speak with experienced bankruptcy attorneys at 888-297-6023.

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If a debtor is filing for bankruptcy under chapter 20 in Fourth Circuit, he/she can be eliminated to pay second mortgages and other junior liens under certain circumstances.

As per the above statement, if you are a resident of Fourth Circuit – Maryland, Virginia, North/South Carolina, and you have filed for chapter 13 bankruptcy immediately after filing for Chapter 7 bankruptcy, your second mortgage, junior liens, and HELOCs can be waived off.

Confused? Let us get into the detail..!!

What do you mean by Lien Stripping?

Under Chapter 13 of bankruptcy, you can eliminate/waive off any second mortgage, junior lien or any other lien/mortgage that is “wholly unsecured” other than your first mortgage. This amount ( the unsecured debt) can be paid off slowly at the rate of pennies as per the Chapter 13 repayment plan.

Let us explain the term wholly unsecured with an example. The value of your home is $400,000. Your first mortgage unpaid value is $450,000 and the second Mortgage is worth $50,000. Now, since the equity value of your home is not enough to cover/pay back your first mortgage, your second mortgage value becomes wholly unsecured and therefore eligible for lien stripping (to be eliminated).

Therefore, the term “wholly unsecured” is the amount that is calculated after deducting the equity value of your home from the unpaid balance on your first mortgage. The leftover amount is calculated as the wholly unsecured value which is subject to be eliminated/waived. Lien stripping is allowed only in Chapter 13 and not Chapter 7. Exception under Chapter 7 available only for residents of Eleventh Circuit

What do you mean by Chapter 20 Bankruptcy?

Chapter 20 is nothing but the process of filing for Chapter 13 bankruptcy immediately after filing for Chapter 7 bankruptcy. This process of filing for bankruptcy under 2 chapters simultaneously is formally known as Chapter 20. This is commonly done because under Chapter 7, all debts are not eliminated like – Child support, Tax, Alimony and few Priority debts. Hence, once debts are waived off under Chapter 7, the remaining amount can be paid in off under Chapter 13 in a 3-5 years payment plan, making the pay back process simpler for the debtor.

Care must be taken that the filing for both the chapters must be done at a reasonable gap, since if both are filed very close to each other, then it may happen that the debtor will not get the discharge under chapter 13. Though, it is possible to get the protection for the payment plan period which ca further help the debtor to pay off his debts smoothly.

Lien Stripping in Chapter 20 Bankruptcy

Based on the judgment of the Court of Appeals in the Fourth Circuit, irrespective of the availability of discharge, a debtor can now strip off junior liens in Chapter 13 Bankruptcy.

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According to the ruling of the Fourth Circuit, people who file for Chapter 13 bankruptcy do not need to include social security as part of their disposable income. This is a huge relief say lawyers of Dallas based bankruptcy law firm Recovery Law Group as the social security income can be saved and you might have surplus income after paying expenses and all planned payments as part of the repayment plan.

Most states are undecided with respect to the inclusion of social security in your disposable income during a Chapter 13 bankruptcy. Despite bankruptcy code stating that social security should not be included for disposable income calculation, many bankruptcy courts dismiss the Chapter 13 repayment plan for not including social security income as being proposed in ‘bad faith’.

The fourth Circuit’s decision is a welcome breath of relief for residents of Maryland, North and South Carolina, Virginia and West Virginia. The court ruling is in accordance with the bankruptcy code’s exclusion of social security income. With this decision, they have joined the Fifth, Sixth, Eighth and Tenth circuits.

The landmark decision makes it optional for people to include their social security income in their Chapter 13 repayment plan. However, you need to discuss this with your lawyer. In case you haven’t hired one, you can call 888-297-6023 to discuss your case.

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According to a ruling of Ninth Circuit Court of Appeals, Chapter 13 bankruptcy filers who have above-median income compared to people of that state and have no disposable income to pay unsecured creditors cannot opt for a 3-year repayment plan. They will be in bankruptcy for the entire 5 years duration. Chapter 13 bankruptcy lasts for 3-5 years depending on your household income. As per Los Angeles based bankruptcy law firm Recovery Law Group lawyers, people with income below state median remain in bankruptcy for 3 years while those with above median income have bankruptcy plan of 5 years.

However, there are certain exceptions to the rule; like a below-median person can opt for a longer plan and an above-median person can opt for a smaller one if then can pay off all unsecured debt before the five years. Another exception which is seen in some circuits is that above-median debtors can opt for a 3-year plan if their disposable income is negative or zero.

In a chapter 13 bankruptcy, all disposable income is used to repay your debts over a period of 3-5 years. The disposable income is calculated by deducting all essential expenses from your monthly income. Even with a high income, the essential expenses might cause your disposable income to be zero or negative. Many courts had allowed above-median chapter 13 debtors without any disposable income to file for a 3-year repayment plan. This allowed the debtor to get out without spending another 2 years in bankruptcy.

However, the Ninth Circuit has joined other circuits in changing the rules for high-income debtors. With changes in their ruling, the Ninth Circuit joins Sixth, Eighth and Eleventh Circuits on the issue. Above median income people who are filing for Chapter 13 bankruptcy in Arizona, Idaho, California, Montana, Nevada, Hawaii, Oregano or Washington should be prepared for their bankruptcy to continue for 5 years. To know more about bankruptcy, you can call bankruptcy lawyers at 888-297-6023and get details regarding repayment plan and bankruptcy discharge.

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There are many times when misfortune keeps on entering your life. Lawyers of Los Angeles based bankruptcy law firm https://www.staging.recoverylawgroup.com/discuss a case where a couple who was in a 5 year Chapter 13 bankruptcy plan had the misfortune of losing their car to fire. Though the insurance declared it a total loss and offered them $13,000; buying a new car while in their 3rd year of bankruptcy can be a big dilemma.

In case there was no money owed on the vehicle, it is easier for the owners. However, if some money is owed then you need to pay the lender the remaining money before you can get any of the insurance money. before buying a car, it is important to know whether cash will be sufficient, or you will need additional finances. The various options available in this situation include:

• In case you have enough finance to purchase the vehicle, you can go ahead without any permission. You can opt for a used car or a brand new one if you have the resources.
• In case you will need financing for your vehicle, things might be a bit complicated. You need the bankruptcy court’s approval prior to getting the loan approval and will also need a keen lender.
• Court approval is essential before buying anything while under a bankruptcy plan. Since the approval takes 1 months’ time (processing of paperwork, giving permission for financing), it is important that you get permission before approaching any car dealer. For permission, you need to inform the court what happened to your previous car, what amount you will be spending on the new vehicle, how much finance will be done, approximate monthly payments and the effect of the proposal on your chapter 13 bankruptcy plan.
• Once you get the court order you can shop for your new car. Care should be taken to make the car dealers clear about your financial predicament (bankruptcy).
• Before signing on the dotted line, negotiate with the car dealer for not just a better price on the vehicle but also the interest rate on a car loan. Choose the best plan from those available.
• Additional car payments might affect your chapter 13 repayment plan. In case you have money to support the deal, it is good; else ask the court to modify the plan. You can opt to reduce payments being made to unsecured creditors in order to support the car payments.
• However, sometimes creditor’s payment might not be reduced. In this case, your bankruptcy schedule might have to be amended. You need to update your schedule to disclose changes in your financial situation (loss of vehicle, insurance proceed receipt, purchase of a new car).

Though there shouldn’t be any issues updating your bankruptcy schedule, however, full disclosure is the best way forward. A bankruptcy lawyer can help you with the finer nuances. In case, you haven’t hired any lawyer, you can call experienced lawyers at 888-297-6023 to discuss your case.