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  • The 10th Circuit rules

    The 10th Circuit rules

    The 10th circuit court rules reprimand that the tax debt may not be exempted for the client under Chapter 7 if the income tax return is filed late. Income tax return debt can be discharged under chapter 7. However, it needs to fall under certain criteria. The income tax returns are a mandatory procedure that citizens of the USA need to follow every year. Tax debts can be huge, and the clients may seek discharge. You can visit Recovery Law Group for good advice.

    The income tax return debt can be discharged under Chapter 7 when-

    1. The tax debt is income-based for either State or Federal.
    2. The income tax return was last filed 3 years before applying for bankruptcy.
    3. The debtor filed the last return 2 years before applying for bankruptcy. This is under discussion in the 10th circuit rules. Whether to consider 2 years as late for filing a tax return to avail discharge in a bankruptcy case filed under chapter 7 bankruptcy.
    4. The income tax department must have evaluated the client’s tax returns 240 days before filing for bankruptcy.
    5. The debtor must be true and not dodging the tax laws by not filing at all or filing a fraud or dupe return.

    What does file of late tax return mean under the 10th circuit rules?

    When the client files his tax return 2 years before applying for bankruptcy it is considered as a late return. However, this point is still debatable and is under modification stage. A tax return is considered a late return when the IRS files a substitute return when all the debtors’ filing dates are expired. Apparently, a tax return may not be considered late if the IRS files the substitute tax return with acknowledgment of the debtor.

    The 10th circuit court rule may not consider the tax return ‘late’ payable 2 years prior the filing of bankruptcy if a substitute returns is filed with acknowledgment under Internal Revenue Code Section 6020(a). The client’s tax debt can be exempted as per the 10th circuit rule if the client is within this parameter.

    The final verdict

    Since, it’s still debatable, the case may go to the US Supreme court for the further outcome. However, for now, it is established that the tax return is late if the IRS files a substitute tax return within 2 years of applying for bankruptcy. Subsequently, the client will not acquire discharge on tax debts, even under chapter 7. You can receive more information by calling on-(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 in a Chapter 13 Confirmation Hearing?

      What Happens in a Chapter 13 Confirmation Hearing?

      Chapter 13 bankruptcy involves the creation of a repayment plan. In this case, all nonpriority unsecured debtors are paid over a period of 3 to 5-years, some portion of the debtor’s disposable income to settle their dues. A bankruptcy trustee is assigned by the court to oversee the proceedings and to distribute the dues as per the repayment plan. However, the proposed plan gets confirmed only after the approval of the judge at the Chapter 13 confirmation hearing. However, bankruptcy lawyers of Dallas based law firm Recovery Law Group inform that there might be objections to the plan.

      Who can object to the repayment plan?

      30 days after the filing of bankruptcy papers, a meeting of creditors (known as 341 meetings) takes place. In this, all interested parties (debtor, his/her attorney, bankruptcy trustee, and creditors) participate and discuss the proposed repayment plan. They can review the said plan and even file an objection to it (which is followed up in the confirmation hearing).

      The bankruptcy trustee needs to review the plan to check for compliance with bankruptcy laws. Apart from this, they are also required to check your income and expense documents to determine that the creditors are getting adequate repayment. In case you are paying less (than you can afford) to your creditors or your plan is not economically feasible, the bankruptcy trustee can object to the plan.

      Though automatic stay prevents all collection actions, it doesn’t necessarily put an end to the misfortune of the debtor. In case a creditor is dissatisfied with your plan, they can object to anything including bankruptcy trustee’s proposed action, any claim filed by the debtor or the position taken by the judge. Some common reasons for objections in a bankruptcy case include –

      • Expenses claimed by the debtor on Schedule J;
      • Exempted property listed by the debtor on Schedule C;
      • Proposed repayment amount by the debtor;
      • Bankruptcy trustee’s stance of abandoning debtor’s property instead of selling it;
      • Discharging of a specific debt or an uncollectible claim filed by another creditor;
      • Fees demanded by any professional appointed by the court or the debtor’s lawyer.

      Type of objections to the repayment plan

      Amongst the various objections raised against those against discharge against any specific debt or the general discharge hurt debtor the most.

      To file for general discharge objection, the creditor or trustee needs to file adversary lawsuit within 60 days of the date of the 341 meetings. To get a discharge dismissed, they also need to prove that any of the following acts took place during or before the bankruptcy case:

      • Debtor defrauded a creditor;
      • Either destroyed or lost necessary records;
      • Hid, transferred or destroyed property which was part of the bankruptcy estate;
      • Was unable to explain the loss of an asset;
      • Perjured himself/herself

      In case discharge is denied, the debtor remains liable for the debts after the dismissal of the bankruptcy case.

      Every creditor is fending for themselves in a bankruptcy case, therefore it is not uncommon to find creditors objecting to discharge of specific debts during adversary proceedings. In case a general discharge is granted, then all nonpriority unsecured debts will be discharged except for that which was objected against. This leaves the debtor’s resources available for the creditor after the end of the bankruptcy case. A certain debt may be declared non-dischargeable if:

      • If you forgot to mention it in your bankruptcy papers;
      • If it was due to getting property or money by fraud;
      • If it was done with malicious intent;
      • If it was due to embezzlement or larceny;
      • If it is a case of presumptive fraud (credit card charges for luxuries within 6 months prior to bankruptcy filing).

      Confirmation hearing details

      The confirmation hearing can be scheduled anytime within 45 days of the 341 meetings of creditors. Objections to the plan need to be written and filed after creditors meeting. If there are no objections, a confirmation order needs to be submitted. In case there are objections to the plan, your attorney can represent and argue on your behalf (unless the judge specifically asks your presence). During the hearing, bankruptcy debtor and all objecting parties can argue about the merits of their plan. If the judge has any questions regarding the plan, they might seek clarification. Time is given by the judge to settle the matter amicably, if not, an evidentiary hearing is scheduled.

      It is better to be prepared for any eventuality. Call 888-297-6023 to speak with experienced bankruptcy lawyers Dallas about how to get your bankruptcy 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.

      • What do you understand by wildcard exemption?

        What do you understand by wildcard exemption?

        Are you looking to protect a property that is quite important and dear to you? Now that is easily possible with a wildcard exemption. Now, you no longer need to worry about losing important and valuable items which hold a very high value in your life, while filing for bankruptcy. As per the new norm, if your state has a “wildcard exemption” you can protect and safeguard invaluable items from being given away or foreclosure.

        The property that you want to protect or safeguard completely differs from state to state. Hence, depending on your residential location, you will be able to use the “wildcard exemption” as per the statutes and law stated of that particular state. The common items that you can safeguard generally are – furniture, clothing, crockery, and bedding. Also depending upon the state statutes, you might be able to keep either of these as well-

        • Vehicle
        • Jewelry
        • Child and/or spousal support
        • Equity in a residential home
        • ERISA qualified retirement account.

        However, exemptions for luxury items like boats, vacation homes, snowmobiles and the like is not permissible. Nonetheless, some states provide this benefit to its residents where they can safeguard any property or items (even under the category of unnecessary or luxury property) under a certain value/dollar as stated by the state.

        For example, the state has permitted you to use the “wildcard exemption” of value $7000. You can use this to safeguard/exempt any items within the stipulated value of $7000. This can include luxury items as well but must be under the stipulated amount. For instance – your golf club, sauna, a piece of jewelry- all summed up under the authorized value of $700 and must not exceed the value at any cost.


          *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 any 3rd Party Take Advantage of Automatic Stay in Chapter 13 Bankruptcy?

          Can any 3rd Party Take Advantage of Automatic Stay in Chapter 13 Bankruptcy?

          Bankruptcy is confusing and terrifying to most common people. Though there are benefits associated with it like automatic stay and discharge of unsecured debts at the end of the bankruptcy, sometimes, a bankruptcy case might be ‘hijacked’ by another debtor who wishes to take advantage of your bankruptcy case and the subsequent automatic stay. Automatic stay helps in putting arrest to all collection actions by creditors including repossession, foreclosure, threatening emails, phone calls, etc. However, Los Angeles bankruptcy lawyers https://bankruptcy.staging.recoverylawgroup.com/ inform, creditors may request a relief from the automatic stay clause. This happens in case debtor “participated in a scheme to delay, hinder, or defraud creditors.” When such a case happens, the debtor is often caught unaware and generally clueless about their options.

          What is property dumping?

          Many people are unaware that any such term exists. Some people piggyback a ride on others’ bankruptcy cases, availing the benefit of the automatic stay to protect their property. This happened with Dana when she filed for bankruptcy. A local bank filed for a motion alleging that she had defrauded and failed to declare her assets and hide them so that the bank couldn’t make collections on a house in Ventura County. Unfortunately for Dana, that house didn’t belong to her and neither did she have any knowledge of the occupants. But her bankruptcy case was about to be dismissed because of some property whose existence was completely unknown to her.

          The original owner of the property in concern here was another California resident, Angelica who was nearly $40,000 delinquent on her mortgage. She used to check public bankruptcy records to find a person who had recently filed for bankruptcy. She would then record a property transfer deed transferring her house to a bankruptcy filer. The automatic stay benefit accorded to her victim will prevent creditors from foreclosing on her home and protect it. By the time the banks asked for lifting the automatic stay, Angelica made another phony transfer of property to some other person.

          Often there is no prior connection between the victims of property dumping and the perpetrator. In the above-mentioned case, Angelica used to doctor the records in such a manner that the transfer of the house appeared to occur prior to a bankruptcy filing. The process granted her house the benefit of automatic stay till banks filed for relief and the process would be repeated. In Dana’s case, since she was not the owner of the property neither had any idea about it, she did not object for any relief from the stay. The records mentioned Angelica as the owner of the property and her property dumping or hijacking plan was highlighted. Hiring an experienced attorney worked well for Dana’s case. It always makes sense to hire experienced attorneys for bankruptcy cases as the issue is quite complex without any frauds happening. In case you are looking for a consult for your bankruptcy case, call 888-297-6023 to speak with expert bankruptcy lawyers.


            *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.

            • My Cosigner Filed for Bankruptcy; Does it Impact Me?

              My Cosigner Filed for Bankruptcy; Does it Impact Me?

              In many different places, getting loans or line of credit is not easy. There is always a requirement of a guarantor or a cosigner. Parents, relatives, spouse, or friends could play as guarantor/cosigner. How does the bankruptcy of one cosigner impact the other person? This is what we will discuss in detail here. For best and quick solution on bankruptcy related issues, just hop to Recovery Law Group.

              Cosigner and the relationship

              A Cosigner is a person who is liable to pay the loan in case the primary borrower defaults. The Cosigner is the backup plan for the financial institution to recover its debt. The cosigner could be a known or unknown person who agrees to do so. Cosigners are common for people with short or no loan or credit history. People with bad credit score, lower income, no assets to pledge as collateral, etc., usually require a cosigner for swift loan approvals. California, Texas, New York, Los Angeles, etc., are some states where you would typically see the use of cosigners a lot. However, as a cosigner one can be held liable in case of defaults, bankruptcy and other scenarios. Hence, one should be very cautious when opting for the role of a cosigner.

              Impact of bankruptcy declaration

              The unsecured debts which are usually the case with the debts associated with cosigner get released when bankruptcy is filed. The obligation for the primary debtor to pay off the debts is released. This is true for all types of unsecured debts. This release of obligation, however, does not apply to the cosigner and he/she still remains liable to the debt not paid by primary borrower due to bankruptcy. The primary borrower may declare bankruptcy through Chapter 7 or Chapter 13. In the case of Chapter 7 bankruptcy declaration, the primary borrower gets an ‘automatic stay’, which evades the borrower from all unsecured creditors. However, this benefit does not shield the cosigner. This means the risk and liability will shift to the co-borrower or cosigner completely.

              How to protect your cosigner?

              There are ways to protect the cosigner. The primary borrower is the primary link for the bank or any other financial institution. Hence, the cosigner would not know if any payment due has been missed or not been paid. Keeping the cosigner informed in advance can help in keeping the loan current and reducing the number of payment defaults. If you are the cosigner, it is a good practice to keep a check on the payments on every due date. Any payments missed will directly impact on the credit history, score and various other parameters for both the parties involved in the transaction.

              • Reaffirmation of loan

              Reaffirmation is a very difficult decision to make. This is another way of releasing your cosigner. Reaffirmation is the process of making the self completely liable for the loan. The process also will not allow you to discharge the unsecured debt even if you declare bankruptcy in the future. The bankruptcy of the primary borrower would not affect the cosigner however, default would. In the case of loan default, the cosigner will still be liable.

              Chapter 13 bankruptcy declaration

              Compared to Chapter 7 bankruptcy option, Chapter 13 is very beneficial for the primary borrower as well as the cosigner. The ‘automatic stay’ under Chapter 13 covers and protects the cosigner along with the borrower. This is applicable only if the primary borrower accepts to pay the debt in full and includes the same in Chapter 13 repayment plan. When creating a Chapter 13 repayment plan, one can include the cosigned debt and continue to pay the installments with the income available for disposable. This safety shield is a weak one though and can be breached by the creditors if payments are missed or if the bankruptcy is no longer applicable. Making payments regularly as per the Chapter 13 payment plan is the only way to safeguard your and your cosigner interests.

              Credit score implications

              A credit score takes a severe beating of about 200 points if not more if bankruptcy is applied or declared by the borrower. The cosigner might not be directly impacted by the primary borrower’s bankruptcy unless and until he/she continues to make the payments on time. The bank or financial institutions does not care if cosigner or primary debtor is paying the dues, the payments have to be made on time. Until this is true, cosigner’s credit score is safe. Missed payments directly negatively impact the credit score of both parties involved, the primary debtor as well as the co-borrower.

              What happens if the scenario is reversed?

              What if the cosigner or the guarantor is going to file bankruptcy? This can be a serious problem for the primary borrowers. Even if you are current with your payments, you can be in default if your guarantor defaults. This holds good in most student loan scenarios. This directly has a very negative impact on your credit score as well. To minimize damage, the best way is to disassociate the guarantor from the loan either by proving your credit worthiness based on historic payments to the bank or by employing a new guarantor. It is, however, difficult to remove or replace a cosigner or guarantor.

              Cosigner and borrower relationship can be more complicated than it looks. If you are confused, need help or specialized professional assistance, reach out to (888)-297-6203 for the best solution for all your doubts and questions.


                *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.

              • Debt Limits under Chapter 13 Increased; All you need to know

                Debt Limits under Chapter 13 Increased; All you need to know

                Chapter 13 bankruptcy is distinguished from Chapter 7 bankruptcy norms in terms of complexity. Chapter 13 is much simpler and involves less calculation of various factors like a net of income/expenses, debt, etc. But there are some other factors to be considered for Chapter 13 eligibility. These factors can be listed as follows-

                • The chapter is applicable only for individuals hence, business or trusts won’t qualify
                • The individual should not have a recent disqualification
                • Should be able to demonstrate strong sources of money for making the payments for the plans
                • Should have debts within the Chapter 13 debt limits

                If you comply with all the factors above, Chapter 13 is more beneficial to you than Chapter 7. The primary reason for this being the arrangement that allows a debtor to pay off debts as per his/her from the disposable income. Some of the tests under Chapter 7 like the ‘means test’ almost creates an unpractical and impossible plan of paying off debts, particularly the unsecured ones. The debtor’s financial status and ability are at the forefront in Chapter 13, which certainly makes it the best option over Chapter 7.

                Do you qualify for the Chapter 13 debt limits?

                As discussed earlier under the eligibility parameters. There is a certain cap for the debt types, below which all individuals qualify for Chapter 13. That cap or limit can be split as below-

                • The limit for Secured debts is $1,257,850 as per the newest debt limit upgrades versus the earlier cap of $1,184,200. If you evaluated your eligibility for Chapter 13 a few months back and thought, you were just over the cap, this hike of about $70k in the cap will help you be eligible now.
                • The unsecured debts should be below $419,275, which has been hiked by about $25k from the previous cap of $394,725.

                These limits are usually changed once in three years. So, if you are not eligible for Chapter 13 for breaching the debt limits, you might well not be for the next three years, until and unless your debts reverse back below the caps. Reach out to the best at Recovery Law Group for more insight on your eligibility and other viable options.

                How does change in limit cap impact an individual?

                On the eyes, the limit mentioned above is something which not many will breach. However, the biggest barrier is the home mortgage for many especially for those residing in the expensive states like CA, NY, etc. The mortgage loan by itself could exceed the cap of $1,257,850. The second type of people who could be disqualified are students or newly graduated individuals. If you are carrying an education loan, then there is a high probability that you might exceed the $419,275 cap. As per the latest report, over 6 million students in the US carry over $200,000 of loans. It’s no where near the cap, but many students might be breaching that cap easily.

                However, there is some relief for the students. One of the courts recently made a judgment favoring the students. The court said that provided the individual meets all other criterions and is upheld only because of an education loan, then the individual could be eligible for Chapter 13. So, if education loans are troubling you, there can be a positive solution around!

                What is not included in the Chapter 13 debt limits?

                There are certain types of loans/grants which are not included when calculating the debt limit under Chapter 13. Contingent debts are excluded from the calculation. Contingent debts can be described as a form of liability which depends on a future event or a scenario. The most suitable example for this is if you act as a guarantor on a business/trust loan, you are not liable unless and until the business/trust stops paying the installments or defaults. The same scenario is not applicable for the co-signed debt. Co-sign debt consists of two borrowers, one primary and the other as co-signer. Both usually share equal liability and hence, it has to be included when calculating the net debt for checking eligibility.

                The non-liquidated debt is also not included for Chapter 13 calculation. A non-liquidated debt is a debt which has no fixed amount, or the liability cannot be realized appropriately at the present moment. The best example for such debt could be a pending lawsuit. The amount of liability that lawsuit can build upon cannot be accurately determined and hence, it is excluded from the debt calculation for Chapter 13 purposes.

                What if you still are not eligible for Chapter 13?

                If you do not qualify for Chapter 13, Chapter 11 could be the last hope. However, Chapter 11 is expensive and the whole procedure is very tedious, complicated and long. Consult the best no matter where you are Los Angeles or Dallas, +1 (888) 2976203 is your answer. Get all your questions and doubts addressed 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.

                • How Can Bankruptcy Help Me When I Owe More than the Worth of My House?

                  How Can Bankruptcy Help Me When I Owe More than the Worth of My House?

                  Due to bad financial conditions, people might find paying for even essential things like the mortgage, difficult. The situation could be worse for those, who had bought property when the rate was at the peaks as this has resulted in high mortgage payment for a property which is no longer worth as much. This situation is not uncommon, but all is not lost as Sacramento based law firm Recovery Law Group provides options for people who have a home which is worth less than what they are paying in mortgages. (more…)