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  • Decoding the four Bankruptcy Chapters

    Decoding the four Bankruptcy Chapters

    Bankruptcy is a challenging period and there are certain legal and ethical obligations during this period. To standardize the process and to ensure a fair system for all parties involved, there are some predefined codes or chapters that allow for simpler decision making and fair justice. The four chapters in focus today are suitable for businesses as well as individuals. Each chapter can be explained with their application as follows-

    Chapter 13

    Chapter 13 is a bankruptcy code that is specifically designed for individuals or families. The businesses or the sole proprietors shall not be eligible to file bankruptcy via Chapter 13. This chapter is applicable only for single and married bankruptcy filers. Chapter 13 is basically a future payment program that dedicates future disposable income to existing debts. The future debt repayment plan may last up to 5 years depending on your income. If your household income for a family is below the median income of your state, you might have a future debt payment plan for 3 years. If it is more than the median income the plan shall be of 5 years. You might end up paying a good portion of your priority debts which includes, income tax dues, child support, secured loan dues like mortgage, etc.

    Some of the debts that may include payday loans, credit card dues, etc., which are categorized as unsecured debts may be released depending on different circumstances. To know more about Chapter 13 bankruptcy filing, and to clear all your doubts and questions, log on to Recovery Law Group.

    Chapter 11

    Chapter 11 is designed for businesses. Large corporations often use Chapter 11 bankruptcy to prevent shut down of their businesses. Chapter 11 bankruptcy code is probably one of the most expensive Chapters and hence, small businesses are quite allergic to it. It can be also used by individuals who do not qualify for Chapter 13 due to the debt thresholds. Under Chapter 11 the lenders try to identify ways of recovering their debts from the bankruptcy filer by renegotiating the terms and by creating a viable plan for maximum debt recovery. Many factors like sale of less used/underperforming assets need for change in leadership, adding more efficiency to the organization operations, etc., are into consideration while restructuring the loan terms and conditions.

    The filer must demonstrate a convincing plan for repaying the debts. It is a must for such a proposal to be approved by all the lenders and creditors as only court approval won’t be enough. If the filer is unable to present a sustainable plan, a lender/creditor can propose a plan for debt repayment which can then be passed by a voting test. The filer gets sufficient time to enact the approved plan and repay debts, which is why large corporations prefer Chapter 11.

    Chapter 12

    Chapter 12 has been specifically designed for people engaging in the fisherman and/or farming activities. Chapter 12 works very closely with the Chapter 13 plan with the only difference being the flexibility. The farming and fishing activities are seasonal, and one might see inconsistent income for almost half the year. The filer in this scenario has about 3 months or 90 days to put forward a payment plan for repaying the debts in the span ranging from 3 years to 5 years. Unlike Chapter 13, the payments can be made seasonally instead of monthly obligations. The Chapter 12 repayment plan can even release the liability of secured debts, based on the maximum repayment capacity over the next 5 years.

    Chapter 9

    The Chapter 9 code has been specifically reserved for municipalities, utility business, tax districts, government units, etc. Chapter 9 is pretty similar to Chapter 11. A plan has to be put forward by the filer in order to repay the debts. This may include leadership alterations, sale of unused assets, optimizing efficiency, etc. The only distinction is that in Chapter 9, the lenders or creditors are not allowed to propose restructuring plans. However, they can convey their objection or dissatisfaction on the plan or proposal put forward by the Chapter 9 bankruptcy filer. To know about more chapters or understand these chapters better, contact the experts at +1 888-297-6203.


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

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      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.

    • Can you Risk Filing for Bankruptcy Pro se?

      Can you Risk Filing for Bankruptcy Pro se?

      People struggling with debts have the option of filing for bankruptcy. You can either choose to file without a lawyer (pro se) or seek assistance from bankruptcy lawyers to handle your case. As per a study by US bankruptcy court, nearly 1/4 of debtors in California file their case “pro se” which has a success rate of merely 0.04% i.e. 1 case in 2,500 filers results in a bankruptcy discharge. The court approved attorney fee for a non-business case is $4000 and that for a self-employed filer is $5000. The court filing fee for bankruptcy is $281. Though the amount seems a bit high, you end up paying a large portion of the fee over or 3 to 5-year period, in case of chapter 13 bankruptcy. The attorney fees can be incorporated in the repayment plan. Considering the poor success rate of pro se filing, it makes sense to hire an attorney.

      How pro se bankruptcy filing can end up being more costly?

      Chapter 13 bankruptcy is meant to pay off all your secured debts and a fraction of your unsecured debts. One can easily file for chapter 13 bankruptcy on their own as necessary forms are available online and bankruptcy courts have self-help desks to assist pro se filers. In the case of chapter 13 bankruptcy, your disposable income, your assets, and your debts are kept in mind while formulating a repayment plan. You end up paying a fraction of your debt, while the remaining unsecured debts are discharged after your bankruptcy ends. The automatic stay prevents all collection actions by creditors such as repossession, foreclosure, wage garnishment, etc. This starts from the moment you file your bankruptcy papers till the time you keep making repayment plan payments.

      When you file pro se, you need to attend court hearings, legally justify your plan, monitor your case in federal court filing system (Pacer) for motions, hearings and objections. You also need detailed accounts of your financial situation. Any missing document can result in dismissing of your bankruptcy case. Since most pro se filers are inexperienced, they end up missing a couple of details which might prove crucial in their case, ultimately resulting in the dismal success rate of pro se bankruptcy filing. Automatic stay benefit is available only on successful chapter 13 or chapter 7 consumer bankruptcy cases. If your case is dismissed, you still owe your debts, along with with the interest accumulated over the duration of your bankruptcy filing, and the money spent on filing for the case. The creditors can pursue legal actions against you including foreclosure and repossession. Additionally, you will need to file for bankruptcy again if you wish to have a respite from unsurmountable debts.

      According to the Los Angeles based bankruptcy law firm Recovery Law Group, you also have the option of Bankruptcy Petition Preparer (BPP). Many people use a BPP while filing for bankruptcy. ABPP charges $200 to assist pro se filers. However, there have been instances, where a BPP has been involved in the fraud “loan modification” and “foreclosure assistance” schemes. Since they are not trained attorneys, they cannot provide legal advice to you. They can merely assist you in the filing of forms, typing them and directing you to where you can file the case. This is merely an extension of pro se filing.

      Save time and money by opting for experienced bankruptcy attorneys

      The confirmation rate of chapter 13 bankruptcies in California is 55% in attorney represented cases. this is huge compared to 0.04% for pro se filers. It, therefore, makes sense to hire an attorney for your bankruptcy case. when you do so, you do not have to worry about when and which forms to file, drafting responses and objections to motions during the case. in a nutshell, while paying the attorney their fees, you get to have your peace of mind as well as a better chance at getting your bankruptcy case discharged. despite $4000 in attorney fees may seem huge, it is a small price to pay for getting a successful bankruptcy. over a period of your repayment plan, the attorney fees come down to $67 per month which is affordable if you can get a large portion of your unsecured debts discharged.

      Trying your hand at pro se filing, and then re-filing with an attorney, will result in you wasting a lot of your money and crucial time. Changes in bankruptcy laws (in 2005) also result in losing the protection of automatic stay if your case is dismissed. In case your case is dismissed one year prior to the filing date, the automatic stay cannot be extended beyond the initial 30 days (if the case is not heard within 30 days). If you have ha 2 cases dismissed within the previous year, you do not have any protection until you file for a motion for imposing protection. All of this results in additional fees. Filing for bankruptcy is a decision which should not be taken without proper consideration of all factors. An adept bankruptcy attorney can help suggest the appropriate chapter for consumer bankruptcy which suits your condition. Improve your chances of getting respite from harassing creditors by calling at 888-297-6023 to discuss 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.

      • Can Chapter 13 Bankruptcy be the Solution for High-Interest Credit Cards?

        Can Chapter 13 Bankruptcy be the Solution for High-Interest Credit Cards?

        Most people survive by using credit cards. Unfortunately, credit cards charge up very high-interest rate somewhere nearly 25%. Ultimately you end up paying much more than your debt. In the long run, you end up in debt for a long period of time. Let’s say you owe $20,000 on your credit card bill. You will continue making a minimum payment over a 20-year period and end up paying nearly 5 times more than what you actually borrowed. With a monthly payment of $400, you will be able to clear your debt in 23 years! You also end up paying nearly $100,000 as interest on a $20,000 loan. Even if you increase the payment you still end up paying a lot of interest. Even if you double your payment to $800 you end up paying $8000 as interest over the same principal amount. Considering that this is a lot of money, most people are looking for better options to pay off their debts.

        Despite increasing your monthly payment, you still end up paying a lot of interest on your credit card debts. Dallas based bankruptcy law firm Recovery Law Group lawyers suggest filing for bankruptcy under Chapter 13 as a viable option. Bankruptcy seems a good solution. Filing for chapter 13 results in the creation of a repayment plan, in which, you will make monthly payments to your bankruptcy trustee who would distribute it amongst your creditors in a pre-determined share. The payments continue to be made over a period of 3-5 years. After the end of your repayment plan, any unsecured debts such as credit card debts, personal loans, and medical bills are discharged.

        During chapter 13 bankruptcy, for a debt of $20,000, your monthly payments come to $425. Thus, you end up paying a nominal amount of money ($25,500) towards your credit card debts over a 5-year period and end up saving nearly 15 years of your life. Though monthly payments do not go down, you end up saving nearly $85,000! Chapter 13 also helps for other loans like those for home or car. However, since filing for bankruptcy is a matter of grave concern it is important to consult an expert bankruptcy attorney before making any decision. In case you are looking for a bankruptcy attorney to consult for your case, call 888-297-6023.


          *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.

        • Can Bankruptcy Affect 401(K) and Retirement Accounts?

          Can Bankruptcy Affect 401(K) and Retirement Accounts?

          Bankruptcy has been designed in a way to help people recover from bad financial conditions. Consumers can file for bankruptcy under chapter 7 or chapter 13. In either case, they get to keep their retirement funds. The state, as well as the federal government, has exemption laws that prevent an individua’s property against creditors and bankruptcy trustee. The retirement accounts are part of the exemptions provided by the government. These include:

          • 401(k)s
          • 403(b)s
          • Profit Sharing Plans
          • Defined-Benefit Plans
          • Money Purchase Plans
          • Traditional IRAs, Roth IRAs, SEP IRAs, SIMPLE IRAs
          • Keoghs

          In short, all funds in retirement accounts are protected with a few exceptions, like, an IRA account is exempted up to $1,245,475 per person. Bankruptcy lawyers of Dallas based firm (https://bankruptcy.staging.recoverylawgroup.com/) inform that during your bankruptcy you should not make these mistakes –

          1. Don’t take money out of your retirement account. Taking money out of your retirement account essentially converts it from an exempt property into a non-exempt property. The money is no longer protected and is treated like regular cash, which can be collected by creditors.
          2. Don’t use money from your retirement account to pay debts. Many people think that using a 401(k) to pay their debts can help avoid bankruptcy. However, after filing for bankruptcy, take get to know that they could have saved their retirement fund and emerged from bankruptcy intact.
          3. Don’t deposit money from other accounts into your retirement account. Trying to convert your non-exempt assets into exempt assets is not look kindly during bankruptcy. Moving of funds from other accounts into your retirement account can be conceived as a fraud. In case this happens, your retirement account could lose the exempted status. you might even end up losing your 401(k) during bankruptcy.

          Excluded Retirement Plans

          Apart from the exempted retirement plans, there are some which are “excluded” in bankruptcy, i.e. they do not form a part of the bankruptcy estate. Almost all pension and 401K savings plans, which are qualified under ERISA, the federal savings act, are excluded from the bankruptcy estate. However, as always, there are exceptions to the rule. Retirement plans with the only single participant (single employee corporate plans) and plans originating in self-employment may become part of the bankruptcy estate unless subjected to an exemption. Creditors can stake claim to those funds unless efforts are made to protect them. The list of excluded retirement accounts includes:

          • Educational Individual Retirement Accounts (IRA) under IRC 530(1)(b)
          • Pension and Retirement Plans that are qualified under the Employee Retirement Income Security Act (ERISA)
          • IRC 414(d) Government Retirement Plans
          • IRC 567 Deferred Compensation Plans
          • IRC 403(b) Tax Deferred Annuity Plans

          However, their excluded status might have some limitations. Consulting with a bankruptcy attorney is recommended for a clearer picture.

          You must list your retirement accounts on the bankruptcy schedule (though you can keep the money in those accounts). Bankruptcy schedules provide your financial information to the court. In case you are having trouble with your finances and are thinking of filing for bankruptcy, call 888-297-6023 to discuss your case with expert bankruptcy lawyers. They can guide you on how to protect your retirement accounts in case of bankruptcy.


            *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.

          • Bankruptcy Trustee Characteristics and Counter Approach

            Bankruptcy Trustee Characteristics and Counter Approach

            Bankruptcy trustee plays a crucial role by representing the debtor’s case in court. A bankruptcy trustee is delegated by the United States Trustee to closely examine the case to bring forth hidden assets of the debtor. The trustee investigates the debtor’s assets, funds and other resources that can be utilized to pay the creditor.

            In short, it is a government body that mediates between the debtor and the creditor to obtain the best results for both creditor and debtor.

            How can the debtor make his case strong?

            The debtor must abide by and cooperate with the Bankruptcy trustee to make his case under Chapter 7. The debtor’s case is first represented under Chapter 13, wherein he needs to pay the creditor in installments. The case can swing to Chapter 7 once the court finds debtor unable to pay his creditors. It is here that the Bankruptcy trustee makes their presence. They analyze the wealth of the debtor and finds means to pay the creditor. If they find enough funds, they can swing back the case to Chapter 13.

            The debtor must go with the bankruptcy trustee and satisfy all their queries. The debtor needs to submit details of his latest income tax returns, within the first week of their meeting. With the tax report, the bankruptcy trustee can get the detail of the debtor’s present financial situation. If the debtor is not able to submit his tax returns within a week and is trying to hedge; the trustee can take stringent action against the debtor. The trustee can dismiss the case under Chapter 7 and move the case to Chapter 13 bankruptcy.

            Importance of tax return

            Not presenting the tax return documents puts the debtor in a bad light, showing ignorance and negligence on part of the debtor. The USA government is very particular about maintaining tax files and an unorganized and poor presentation or failing to produce any tax documents can put the debtor in the spot. The debtor’s case can be dismissed altogether. It is best to consult professionals and represent your case rightly to get the best result. You can connect with https://bankruptcy.staging.recoverylawgroup.com/ to procure favorable result.

            Filing your case second time under Chapter 7

            The debtor’s case can be rejected by the trustee for not being satisfied by the documents and collaboration with the debtor. However, once rejected the debtor can file their case again. This will not be easy, and the case will be scrutinized thoroughly. The proceedings will attract fees and will have a time frame of 30 days only. The case must be wrapped within 30 days. The debtor can make his case strong the second time by convincing the court that he is genuine and is filing because he didn’t get justice, he deserved the first time. It is easy for the court to dismiss your case the second time on accord of misuse of law for your benefit.

            Best approach

            Why go for a hassle second time when you can get the best in the first time. A little negligence can prove to be an expensive affair. In the first time, you are getting the benefit of presenting your case in the best manner. You need to cooperate with the Bankruptcy trustee and present your documents tax return papers on time. The bankruptcy trustee is very cooperative and offers the debtor enough time to present his documents. The debtor who cooperated got past the case with their assets consolidated.

            However, if the debtor tries to hedge or shows negligence, the bankruptcy trustee warns and dismisses the case. The benefit of filing the case the first time is, the debtor must not pay the fees of court proceedings and the case may likely fall in his side if of course he is honest. The debtor can call and consult on this number (888-297-6203) for any advice and consultation.


              *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.

            • Bankruptcy Basics of Chapter 9

              Bankruptcy Basics of Chapter 9

              The bad financial situation can affect not just individuals but also organizations (both government and private). However, the rules for getting a fresh start differ slightly in both cases. While consumers can opt for Chapter 7 or Chapter 13 bankruptcy to get their debts discharged, Chapter 9 bankruptcy helps municipalities (cities, towns, villages, counties, taxing districts, municipal utilities, and school districts) reorganize their debts. This bankruptcy chapter helps protect debt-ridden municipalities from creditors, while a reorganization plan is being developed for adjusting their debts. Reorganization mainly takes place by extension of debt maturities, reduction of the principal or interest amount or by getting the debt refinanced by taking out a new loan.

              Though it may seem similar to other bankruptcy chapters, lawyers of Dallas based bankruptcy firm Recovery Law group  elaborate that it is significantly different as no liquidation of assets takes place to pay off creditors in this case. Even the bankruptcy court plays a limited role in chapter 9 cases. Its role is restricted to:

               Approval of petition (in case the debtor is eligible);
               Confirmation of the debt adjustment plan;
               Ensuring that the plan is implemented
              Eligibility for Chapter 9 bankruptcy

              A municipality is defined as a “public agency, political subdivision, or instrument of a State.” This includes school districts, townships, counties, and even cities, apart from revenue-generating bodies like highway authorities, bridge authorities and gas authorities. Since only a “municipality” can file under Chapter 9 from financial relief, it is important that they consult the opinion of expert bankruptcy lawyers by calling 888-297-6023 to discuss particulars of their case. The additional eligibility requirements for a Chapter 9 bankruptcy case include:

              1. The municipality must be specifically authorized to be a debtor by either a State law or a government officer or organization empowered by State law’
              2. The municipality must be insolvent;
              3. A municipality must desire to plan to adjust its debts;
              4. The municipality must either:

              a. Obtain creditors’ agreement holding at least a majority in number of claims of each class that the debtor intends to impair under a plan under chapter 9;
              b. Negotiates in good faith with creditors and fails to obtain the agreement of creditors holding at least a majority in number of claims of each class which debtor intends to impair under the plan;
              c. Be unable to negotiate with creditors as such negotiation is not practical; or
              d. Believe reasonably that a creditor might get a preference.

              What happens during Chapter 9 bankruptcy?

              Municipalities need to seek protection under Chapter 9 of the Bankruptcy Code. They also need to file a list of creditors. Though the debtor should provide the creditors’ list at the time of filing, in this case, bankruptcy court allows the option to provide it at a different time. The case is not assigned automatically to any judge to avoid any political interference in the case of Chapter 9 bankruptcy. A notice of commencement of the case and the order for relief is essential. This notice is published at least once a week for three consecutive weeks in a newspaper having general circulation in the district where the case begins as well as in other newspapers which are generally used by bond dealers and bondholders. The newspapers in which notice and additional notice is published and who gives or receives notice by mail is a prerogative of the court.

              The bankruptcy court also allows objections to the petition including –
               Whether negotiations were conducted in good faith,
               Whether the state has authorized a municipality to file,
               Whether the petition is filed in good faith.

              In case an objection is filed against the petition, a hearing on the objection is held by the court. In case the petition is not filed in good faith or does not meet the requirements of Chapter 9, it can be dismissed by the court. If the petition is not dismissed on any objections, Bankruptcy Court needs to order relief and allows the case to proceed under Chapter 9.
              Just like other bankruptcy cases, an automatic stay is applicable in this case too. In fact, additional automatic stay provisions prohibit any action taken against officers and inhabitants of the debtor if they seek to enforce a claim against the debtor. The stay refrains a creditor from bringing a mandamus action against any officer of the municipality; against an inhabitant of the debtor to enforce a lien on or arising out of taxes owed to the debtor.

              A proof of claim or interest needs to be filed within the stipulated time frame. It is considered filed in case of Chapter 9 if it appears on the list of creditors filed by the debtor. In case it appears disputed, contingent, or unliquidated, then a creditor needs to file a proof of claim. The court, according to Bankruptcy Code Sections 903 and 904, the court has limited power over operations of the debtor. It cannot interfere with political powers, property or revenues of the debtor as well as the debtor’s use of its property and revenues.
              The role of the trustee is limited. They do not preside over a meeting of creditors (it is not held), cannot convert the case, do not supervise the administration of the case, and do not monitor financial operations of the debtor too. The role of creditors is also limited in this case, since there is no meeting of creditors. They can, however, choose and authorize attorneys and accountants to represent the committee, consult with debtors regarding the administration of the case, investigate the conduct, asset, liabilities and financial condition of the debtor and formulate a plan for the cumulative interest of all creditors.

              Discharge in chapter 9
              A plan for adjustment of debts must be filed by the municipality to adjust their debts. The plan is confirmed if it meets the statutory requirements. A discharge is available for municipal debtor on confirmation of debt adjustment plan; a deposit made by the debtor is distributed as per the plan by disbursing agent appointed by court and determination by the court that securities deposited constitute valid legal obligations of the debtor. Exceptions to the case also exist for –
               Any debt excepted from discharge by plan or order confirming the plan;
               Any debt owed to an entity before confirmation of the plan, who had no notice or knowledge of the case.

            • Bankruptcy and Median Income Calculation

              Bankruptcy and Median Income Calculation

              Bankruptcy is not a very exciting position to be but there are a lot of choices, questions, problems that have to be addressed almost instantaneously. The first is to identify which Chapter are you looking to file your bankruptcy in. Either Chapter 7 or Chapter 13. Then you have to figure out if you are eligible for Chapter 13 or Chapter 7. If you are eligible, you have to understand the implications of the same and approach the bankruptcy court.

              Tests, Chapters and eligibility

              There are eligibility factors for each Chapter, and one cannot simply select the Chapter without figuring out the eligibility. Before even getting into eligibility, just outline some key properties of each Chapter for better understanding so that we focus on one Chapter that would suit the most for an individual during bankruptcy. Under the scenario of Chapter 7 bankruptcy, all your non-exempt assets shall be liquidated, and the debts shall be set off by the proceeds of the liquidated assets. The debts shall be prioritized based on secured and unsecured. If the liquidated assets are not able to set-off some debts those shall be written off or released or discharged and no liability carries after the event of bankruptcy.

              On the other hand, Chapter 13, is a union of the filer, lenders, bankruptcy trustee and the court, who come together to assess the scenario of the debtor to determine a commonly agreeable plan. This plan usually constitutes of consistent monthly payments for the period of 3-5 years based on the amount of debt. There are clear thresholds mentioned for the amount of limit allowable under each category, secured loans, and unsecured loans. Determine eligibility for Chapter 13 is pretty straight forward. Since the plan is based on future payouts for the period of 3-5 years, the filer might end up paying a good percentage of his debts by the end of the payment plan under Chapter 13. There could be a release of a certain portion of unsecured debt also, depending on the disposable income. Need help to understand more about Chapter 7/13, log on to Recovery Law Group.

              Median income and disposable income

              The median income is the average income a family/individual makes in California. This used as a standard to determine the eligibility for Chapter 7. The median for a single person is $4,565 per month for the 2018 Financial Year. For a family of four persons, it is $6,097 per month. If your income is above this threshold, which means you do not qualify for the median test, you would have to clear the means test. The means test will let you take an aggregate of last 6 months of income and compare it to the California median. Based on the available disposable income, Chapter 7 or Chapter 13 can be considered.

              The disposable income is really important for Chapter 13 as that will be the amount of money to be used to settle the debts. The actual expenses are not allowed but a fixed limit on expenditure has been pre-defined. You can arrive at your disposable income by deducting those fixed limits. For instance, living expenses have been capped to about $650 per individual per month. This includes food, day-to-day expenditures, personal care, apparel, etc. Other expenses can be limited to about $2,500 per month. This would typically include, healthcare costs, car costs/operating expenses, housing expenses, etc. If in the means test, the disposable income figured out is below $128, the filer would qualify for Chapter 7. If you do not qualify for the median income test and means test, Chapter 13 would be the only alternative.

              Disqualified Chapter 7 by a hairline? What are the options?

              Consulting a qualified and professional lawyer can help in determining the ways to arrive at the lowest possible disposable income in order to gain eligibility to Chapter 7. The number of expert help would be +1 888-297-6203. It has been learned that most people make several errors in calculating their disposable income and file for Chapter 13, ending up with 5 years of payment plans, that can be stressful. The faster way is certainly Chapter 7 that could resolve all your debts in a span of 60-90 days. The following tips could be used to qualify for Chapter 7 if disqualified by a hairline-

              • The median income is compared to the average income in California. This might not be that beneficial for people in California but is pretty beneficial for people with a lower cost of living like Dallas, Los Angeles, Austin, etc. California being the costliest states of the United States, most people might be able to meet the eligibility test of median income, which they might assume they will not
              • Not qualifying in Means test marginally can still be compelled to Chapter 7 by the bankruptcy court. This differs on a case to case basis and you will need a professional lawyer or an attorney who can find ways to convince the bankruptcy court based on certain valid propositions
              • The average of 6 months is used as the figure to arrive at disposable income. If you have lost job or income sources recently and expect the income to decline in the near future, it is advised to then delay bankruptcy filing by 2-3 months. This will further lower your average income and ensure you qualify for the Chapter 7 bankruptcy code
              • If you are filing Chapter 7 bankruptcy in Dallas  because of business debt, you would not need to qualify for the means test either. Your business debt, in that case, has to be over 50% of your personal debt. Since a home mortgage is regarded as personal, it is very difficult to breach 50% of the debt. If you do not have a mortgage or any huge personal debt, there are good chances that your business debt shall exceed over 50%. You wouldn’t then need to qualify the means test for eligibility

              Bankruptcy laws are not one of the easiest ones to interpret. Professional help can help you in getting out of the not so pleasant situation quicker and better. Reach out to +1 888-297-6203 for best guidance right now!


                *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.

              • Avoid Transfer of Real Estate Prior to Bankruptcy Filing If You Seek Respite from Financial Issues

                Avoid Transfer of Real Estate Prior to Bankruptcy Filing If You Seek Respite from Financial Issues

                Bankruptcy is the best legal recourse available to people who are struggling with financial debts which they are simply unable to pay off. Though it is essentially designed to provide respite to people, there are rules attached to it. One of them is about the transfer of property prior to a bankruptcy filing. Many people transfer assets (jewelry, shares, property, etc.) to family and friends in order to avoid them becoming a part of the bankruptcy estate. However, the court doesn’t look too kindly on such transfers. Moreover, inform bankruptcy lawyers of Los Angeles based firm Recovery Law Group mixing of bankruptcy and civil lawsuits can be quite horrible as seen in the case of Catherine, a California resident who was handling two lawsuits and two bankruptcies.

                Catherine did not get along with her neighbors and often there was discord among them due to her behavior. She used to play loud music in the middle of the night which disturbed her neighbors; took her dogs to defecate in front of neighbors’ front lawns, and even released her vicious dogs into her yard to scare small kids and grandchildren of her neighbors. She even posted signs making outrageous claims defaming her neighbors. The signs accused neighbors of criminal and civil misdeeds and tanked their reputation, resulting in a loss of business for them. All of this behavior resulted in the neighbors’ filing a defamation lawsuit against Catherine.

                While the defamation lawsuit was still pending, Catherine transferred the deed of her house to her daughter, with simply a “life estate” in the house. A life estate means that a person can reside in the property until they die. Catherine’s daughter agreed to return the deed on request, thereby becoming the legal owner of the house. After one year of this transfer of property, Catherine filed for Chapter 13 bankruptcy. The automatic stay benefit resulted in seizing of all collection actions including putting a stop to the defamation lawsuit of the neighbors since they were asking for monetary damages. With the dismissal of her bankruptcy after a couple of months, the automatic stay benefit was also lifted.

                The neighbors filed again to set aside the transfer of her house as dishonest. Since they had filed a defamation lawsuit expecting to win, the move by Catherine to transfer her house was probably an attempt to make her “judgment proof.” In case a person is judgment proof, the plaintiffs, even after winning their case won’t be able to collect any compensation. Catherine lost the defamation suit and was expected to pay $320,000 to the neighbors, but she appealed against the verdict. One year after filing the appeal (and waiting for an update on the same), she filed for a Chapter 7 bankruptcy. By then, the judgment for $320,000 was affirmed.

                 After two months the court ruled that the transfer of Catherine’s house to her daughter was void. With this ruling, she became the legal owner of the house and that the property could be sold off to pay her dues to the neighbors. Catherine again filed for an appeal against the verdict, but unfortunately passed away before it could be decided. Her death resulted in the transfer of the ownership to her daughter as per the terms of transfer. This resulted in her estate having no money to pay off the neighbors’ debts. In case the transfer was deemed void, the property will be handed over to Catherine’s bankruptcy trustee who would then sell it off to pay the debts.

                Catherine had transferred the house to her daughter’s name in order to protect it. However, since the transfer was considered fraud, it was voided. Thus the legal claim of the house remained with Catherine (and eventually her bankruptcy trustee). The law restricts people from transferring property to family and friends prior to bankruptcy filing since this is an attempt to prevent the sale of the said property during Chapter 7 bankruptcy. With the court holding on to the appeal, the transfer was declared void and after 20 long years’ Catherine’s neighbors received the compensation.

                Often courts are able to see through the elaborate schemes people concoct to trick their creditors. Bankruptcy trustees are required to see through all paperwork to ensure that no asset goes unaccounted for. Any transfer of property to family and friends within a specified time frame, without proper compensation, is generally considered fraud. Such activity may result in dismissal of your bankruptcy case too. If you are going through a tough financial phase, feel free to call at 888-297-6023 to discuss your case with expert bankruptcy lawyers.


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                • Who is Notified of Your Bankruptcy Filing?

                  Who is Notified of Your Bankruptcy Filing?

                  Despite being one of the best legal options to get rid of accumulated debt, people refrain from filing for bankruptcy probably because they fear being judged. One of the major concerns people have is that their bankruptcy will be announced to their family and friends, which probably is shameful for them. While considering bankruptcy, and to quell any fear, it is important that people are aware of who will be aware of their bankruptcy filing. According to Dallas based law firm Recovery Law Group, there are two chapters under which individual debtors can file for bankruptcy – Chapter 7 and Chapter 13. Both bankruptcy chapters come with the automatic stay benefit and prevent creditors from taking any collection actions. However, there is a difference in the way your assets and debts are treated in both of them.

                  In the case of Chapter 7 bankruptcy, your assets are divided into the exempt and non-exempt property. There are two types of exemptions in bankruptcy, state and federal. Some states allow you to choose between federal and state bankruptcy exemptions, while others like California do not. However, provisions are made to protect different amounts of various properties like house, car, and household goods. In the majority of cases, nearly all property of a debtor comes under the exempted category, thereby offering protection. In case some property is not protected under the exemption, it is sold by the trustee to pay off creditors. Any dues which remain after selling off of non-exempt property are discharged at the end of the bankruptcy.

                  When an individual fails to qualify for Chapter 7, the other option available is Chapter 13. In this bankruptcy chapter, a repayment plan is devised keeping in account your earnings, your debt, and your assets, in order to repay your creditors. The repayment plan continues for 3-5 years duration after which any unsecured debts like credit card and medical bills or personal loans are discharged. Though Chapter 13 is slightly tougher, it is ideal for debtors with income above the mean state income.

                  Who knows of your bankruptcy?

                  In case you are facing a difficult financial situation and wish to weigh in your options you can call 888-297-6203 to consult with expert bankruptcy lawyers. Once you have reached the decision of filing for bankruptcy after discussing with your attorney and undergoing the mandatory credit counseling course, the case is filed at the United States Bankruptcy Court. Due to filing in a court of law, it becomes public record. However, finding the details of your case is like looking for a needle in a haystack. Unless the details are available, it is next to impossible to know about your bankruptcy. There are some people though, who are aware of your bankruptcy proceedings. These include:

                  • Your creditors are aware of your bankruptcy as you are expected to provide a list of your creditors to the court. This is because your creditors need to be aware of your impending bankruptcy and the automatic stay. In case you forget to add a creditor’s name, those debts won’t be discharged through bankruptcy. Apart from the creditors, the local bankruptcy trustee is aware of your bankruptcy. However, both court employees and the creditors are barred from reporting about your bankruptcy.
                  • Family and friends are generally unaware of your bankruptcy unless they have co-signed a loan which may result in them having some liability with you filing for bankruptcy. Unless they go digging around, they won’t be aware of your bankruptcy till you spill the beans, because the court prohibits court employees and creditors from disclosing such information.
                  • Employers are generally not notified of the bankruptcy filing and can only be aware if you inform them or they search through public records. Many people are worried that bankruptcy might hinder their chances of better employment but that is not so. However, bankruptcy shows on your credit report. Thus, if a prospective employer opts for a credit check before hiring he/she might become aware of your bankruptcy filing. One ray of hope for you is that employers cannot discriminate hiring prospective In some cases of Chapter 13, repayment to creditors might be deducted from your pay cheques due to which HR might become aware of your bankruptcy. Similarly, if wage garnishment is taking place then also your employer might become aware of your bankruptcy.

                  Bankruptcy has been devised as a mean to help people struggling with insurmountable debts to start afresh. It is no way meant to name and shame you. In case you are considering bankruptcy as a means of getting out of the financial mess, you need to consider an expert lawyer who can guide you through the entire way.


                    *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 if You Forget to Include a Creditor in Your Bankruptcy?

                    What Happens if You Forget to Include a Creditor in Your Bankruptcy?

                    A lot of paperwork is involved when you file for bankruptcy, including documentation for your income, assets, and a comprehensive list of your debts as well as your creditors. This complete list of creditors is used by the court to inform everyone concerned about your bankruptcy. Since all of this involves a lot of paperwork, it is quite possible that one or two creditors might miss making the list. Since creditors also have legal rights in your bankruptcy case, if any of them fails to get a mention in your list of creditors while filing for bankruptcy, what effect can it have on your case?

                    What is the creditor mailing list?

                    According to Los Angeles based law firm Recovery Law Group, the “Creditor Mailing List” (also known as the mailing matrix) should include all your creditors along with their contact information. It must also include debts like student loan debt which are not handled via bankruptcy. Once you file for bankruptcy, this mailing matrix is used to inform all creditors of it. This is an important step as creditors wish to be kept in the loop when such an occurrence happens.

                    The creditors, depending on which chapter of bankruptcy you file, might be involved in the confirmation of your debt, or pay-out of your liquidated assets, or might be required to approve the repayment plan. To be eligible for their repayment portion, they are required to file a “proof of claim.” If they have no information about your bankruptcy, they cannot file a proof of claim and thus will lose their chance of getting payment from your bankruptcy.

                    The creditor mailing list is an integral part of your case. When you file for bankruptcy, you get automatic stay protection which effectively ceases all collection actions by creditors. Unless the creditors are aware of your bankruptcy, they will not follow automatic stay. Thus you might lose wages to garnishment or have your home foreclosed or face a lawsuit for collection if you miss out any creditor on the creditor mailing list. Additionally, omitting a creditor can affect your bankruptcy too! The bankruptcy forms are filed under a penalty of perjury, i.e. leaving any information off the papers intentionally is considered a crime. The unintentional omission is understood by the court and you are given a chance to rectify your mistake. If you have unintentionally left any creditor off from the mailing list, the consequence depends on which chapter of bankruptcy you have filed.

                    Adding creditor in Chapter 7 bankruptcy

                    In Chapter 7 bankruptcy, also known as liquidation bankruptcy, your non-exempt assets are surrendered to the court which is then sold off to pay the creditors. Many times, thanks to state and federal exemptions, debtors have little to no non-exempt assets; such cases are known as “no asset” bankruptcy cases. When some non-exempt property is available, which can be sold off to pay creditors, the bankruptcy is known as an “asset” bankruptcy. In case you forget to include a creditor in the creditor mailing list while filing for Chapter 7 bankruptcy, the outcome depends on whether it is an asset or no-asset bankruptcy.

                    • Asset bankruptcy

                    When you have non-exempt assets, unsecured creditors get paid in proportion to the amount you owe them, when they file a proof of claim. When you leave a creditor off the mailing list, they won’t be notified of bankruptcy and subsequently will not be able to file proof of claim, thereby losing out on their repayment amount. Any unsecured creditor who is left out of their rights can go after you to collect the dues after a bankruptcy discharge. The only respite you have in this case is that they can collect dues only from non-exempt assets. Chapter 7 bankruptcy exemptions can help save a number of your assets. Secured creditors, if they are left out of creditor mailing list, have rights to pursue collection actions against you after your bankruptcy discharge.

                    • No asset bankruptcy

                    In this case, since there are no non-exempt assets, the unsecured creditors (credit card, medical bills, personal loans, etc.) do not get anything in bankruptcy. Since unsecured creditors do not have any property attached to their debt, they don’t have any proof of claim to file. If you accidentally forget to add an unsecured creditor’s name to the list, not much of consequence happens in this particular case. As is the case with no asset bankruptcy, unsecured creditors, listed or not, get nothing in such cases. The debt gets discharged with creditor having no claim to collect.

                    Consequences of leaving a secured creditor out of the creditor mailing list are far more serious than leaving an unsecured creditor out. You can face collection actions after a bankruptcy discharge. Secured debts which are linked to the property are not discharged during bankruptcy but can be surrendered or reorganized. All of this requires the involvement of the creditor. If you wish to reaffirm your car loan, you need to make payments through and even after your bankruptcy. If you miss adding the name of your auto lender or any other secured creditor off the mailing list, the debt won’t be discharged and the creditors are eligible to collect the payment even after your bankruptcy, which may include foreclosure and/or repossession of said property.

                    Certain debts like child and spousal support, government taxes, etc. are not discharged during bankruptcy. Since these debts won’t be discharged, the accidental omission of such debts will not have any effect on your bankruptcy case. They were and remain collectible even after bankruptcy. Since a majority of Chapter 7 cases are no asset cases, there aren’t any major consequences of the accidental omission of a creditor.

                    What happens if you fail to add a creditor in Chapter 13 bankruptcy?

                    Creditors have more involvement in a Chapter 13 bankruptcy compare to a Chapter 7 case. They have a say to review, object or approve your repayment plan. If and when your repayment plan is approved, the payments are divided amongst your creditors proportionately. If you fail to include a creditor in this type of bankruptcy, the debt won’t be included and therefore not discharged at the end of your bankruptcy. This leaves the creditor free to attempt collecting the debt after your bankruptcy discharge.

                    Options available for you if you forget to add any creditor when you file for bankruptcy

                    Irrespective of the type of bankruptcy filed, if you realize you have unintentionally omitted any creditor, you should contact and inform your bankruptcy attorney of it. They can help guide you on ways to fix the mistake. If you haven’t reached the end of your bankruptcy, filing a form in bankruptcy court to add the missing creditor can help get the problem solved. In case you have got your bankruptcy discharge and get a collection notice from a left out creditor, you need to contact your bankruptcy attorney. Depending on the type of bankruptcy you had filed, the lawyer can find out if the creditor has any right to collect dues or not. An unsecured creditor trying to collect dues from you has no right to them if you filed for a no-asset Chapter 7 bankruptcy. The creditor can be informed by the lawyer of the case in such a situation. If that is not the case, the bankruptcy lawyers can assess whether different factors like the statute of limitation can affect your dues to the creditor.

                    If you remember to have left out a creditor, contact your bankruptcy attorney immediately. Wilful omitting of a creditor is considered a form of perjury, which can lead to the filing of criminal charges and even dismissal of your bankruptcy case. Bankruptcy can be trying times, emotionally and financially. It is important to have a bankruptcy attorney by your side in such cases. If you don’t have one, feel free to call 888-297-6203 to get your case evaluated.


                      *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.