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  • Is Keeping All Your Property in Chapter 13 Bankruptcy a Wise Decision?

    Is Keeping All Your Property in Chapter 13 Bankruptcy a Wise Decision?

    Filing for bankruptcy is a decision that people are reluctant to take because many times it involves letting go of your property. According to exemptions provided by state and federal government, lawyers of Dallas based bankruptcy law firm Recovery Law Group, explain that you can keep only the amount of property which is exempt. Any non-exempt property is sold to pay off your unsecured creditors in a Chapter 7 bankruptcy case. Contrary to this, Chapter 13 bankruptcy allows you to keep the non-exempt property if you pay your unsecured nonpriority creditors an amount equal to the non-exempt property along with the monthly payments as per repayment plan.

    However, keeping your non-exempt property might be costlier than you think. In case all property you own is exempt, you are a lucky person; as, for all non-exempt property you wish to keep, you need to pay for it. To know more about bankruptcy exemptions, you can call 888-297-6023 and talk with expert bankruptcy lawyers. Many states allow debtors to choose from federal and state bankruptcy exemptions. You can keep the exempt property no matter which bankruptcy chapter you file under, however, the fate of non-exempt property depends on the chapter of bankruptcy you have filed. In the case of Chapter 7, your non-exempt property is liquidated, and the proceeds are used to pay your unsecured debts. In the case of Chapter 13 bankruptcy, you pay your unsecured creditors through your repayment plan an amount equivalent to any non-exempt property you wish to keep.

    Why you should avoid keeping all your non-exempt property?

    Chapter 13 bankruptcy involves a repayment plan wherein the debtor is expected to come up with a plan to pay the unsecured creditors (medical bills, credit card bills, etc.) a part of the debts over a course of 3 to 5-years time. This is done using the disposable income of the debtor. Disposable income is calculated by considering the monthly income and expenditure of the debtor and the amount expected to be paid for secured and priority debts like certain taxes. The non-exempt property also plays an important role in this. If an individual debtor wishes to keep any or all their non-exempt property, they need to pay the unsecured creditors the higher amount of either their disposable income or a value equal to the non-exempt assets. In case you wish to keep all your non-exempt assets and do not have enough disposable income, your repayment plan might get rejected by the bankruptcy court.

    Since mortgage arrears, car loans and priority debts need to be paid off in full, keeping many non-exempt properties might increase your debt problems. In case you wish to keep your house or car, you cannot afford to miss any payments on those dues. Missed payments can lead the creditors to ask the court for a lift on automatic stay and thus they can resume foreclosure or repossession actions. Chapter 13 also allows you to catch up on secured debt payments. You can use the 3 to 5-years repayment plan to pay prearrange as well as regular monthly payments on secured and priority debts. Keeping non-exempt property which you do not need will add up to your expenses, therefore it is important to weigh your options clearly before taking any decision.


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    • How to Determine Chapter 13 Bankruptcy Eligibility?

      How to Determine Chapter 13 Bankruptcy Eligibility?

      Chapter 13 can be a very good option for many people, especially those who are struggling to keep up their assets intact even after filing bankruptcy. However, not all filers are eligible to apply for Chapter 13 bankruptcy code. There some basic requirements to be eligible for filing under Chapter 13. These can be listed as follows-

      • No lag with respect to income tax filing whether federal or state
      • The debt is within the predefined threshold
      • Should be employed or should have some income source to fund the payment plan to be determined under Chapter 13
      • Should be an individual and not a business. The sole proprietor is an exception as all business accounts are merged into the individual’s account for bankruptcy purposes

      What has the income tax filing got to do with my eligibility?

      The income tax filing is a very basic requirement as people evading state and federal tax liability are not regarded with great respect in the eyes of law. The income tax filing for state and federal has to be current. Also, there should be a clean history with respect tax filing for the last 4 years from the date of filing for bankruptcy. If you are not current with respect to the last 4 years, you can get current as soon as possible and present the same to the court in order to prevent your case from being dismissed. To know more about getting current and getting eligible for Chapter 13, log on to Recovery Law Group .

      What does “Source to fund the Chapter 13 payment plan” mean and include?

      Chapter 13 is a fixed payment every month for a specific time period up to 5 years to repay as much of debt possible. This fixed monthly payment needs to be sourced appropriately and has to be some income, which over and above, basic expenses. The additional income or disposable income can be sourced from multiple avenues as listed below-

      • Salary or wages may be regular and/or seasonal
      • Self-employment income
      • Commissions / Incentives that are related to job/employment a more permanent or consistent in nature
      • Social security and pension
      • Disability/worker’s compensation benefits
      • Welfare / Unemployment benefits
      • Any child support or alimony received
      • Rents and Royalties
      • Proceeds from the sale of assets like real estate, particularly if your nature of business involves sale and purchase of assets
      • The income of spouse, if married

      The basic requirement for the income source to qualify is that it should be consistent and over and beyond the basic necessities. There should be some disposable income that could be diverted to Chapter 13 payment’s plan.

      Benefits, flaws, and restrictions for Chapter 13

      Benefits are very clear, if you are not eligible for Chapter 7 bankruptcy or if you wish to safeguard all or most of your assets, this is the best alternative available. Also, the credit score improvement can be slightly easier with respect to Chapter 13. The major flaw is with respect to the debt threshold. If your debt is beyond that threshold you won’t be eligible for Chapter 13. Also, with businesses not able to consider this Chapter, it holds no good even for stockbrokers and commodity traders. Stock and commodity traders are restricted from using Chapter 13 even if they want to release their personal debts.

      Procedure for filing Chapter 13

      The basic requisite as a procedure for Chapter 13 is to disclose all information, with respect to your current financial condition, in the most accurate form possible. Expenses, income, lenders, assets, recent transactions, etc., all have to make a detailed appearance in the bankruptcy documents. You need to take a counseling course that will teach you to manage finances better and pay a filing fee along with the documents package to begin the bankruptcy filing under Chapter 13. Under most circumstances, you get 2 weeks or 14 days to submit for a repayment plan unless and until the timeline is revised by the court. Documentation and procedure always require consultation and expert advice. When you have all that with just a phone call, why wait and waste time then. Dial in +1 888-297-6203 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.

      • Filing Bankruptcy When Unemployed

        Filing Bankruptcy When Unemployed

        Filing for bankruptcy does not specifically mention the requirement of an income source. But, directly or indirectly there is a significant impact of employment on eligibility for Chapter 7 and Chapter 13. If you have lost a high salary job recently, you might end up qualifying for Chapter 7 and at the same time, if you just lost the job and are unemployed while filing bankruptcy, you won’t qualify for Chapter 13. It’s really tricky when it comes to employment and bankruptcy. To know more such interesting stuff about bankruptcy, log on to Recovery Law Group.

        What are the employment factors affecting bankruptcy?

        The past, present, and future all three aspects are touched while looking into the employment status while evaluating bankruptcy. Some of the key aspects relating to employment that needs to be assessed can be listed as follows-
        • The duration or tenure of employment
        • The pay scale difference between the previous employment and the current employment
        • Possibilities of availing job in the near future if unemployed
        • Other sources of income
        The four factors listed above are the most important discussed aspect that can determine whether you will have to file Chapter 7 or Chapter 13. The employment and income sources become extremely important for Chapter 13 as you need some disposable consistent income in order to qualify.

        How does employment impact Chapter 7?

        Chapter 7 is basically the disposal of all nonexempt assets to settle the debts. Its one of the fastest ways to get over debt, release maximum unsecured debt, and have a fresh start with finances once again. It is quick too. Being unemployed actually helps you to qualify for Chapter 7. A means test is the basic eligibility test for the filer to be eligible for Chapter 7. Means test basically is the comparison of your income with the median state or federal income. If your income minus the standard expenditures are less than the average median of state or federal (depends on the state in which bankruptcy is being filed), you qualify for Chapter 7 bankruptcy.

        The average gross income earned by each and every family member over a period of recent six months is considered for means test eligibility. If the income is above the state/federal median, some standard deductions are reduced to account for daily expenses based on a number of family members. If the income then falls short of the state or federal median, you qualify, or you will have to consider other alternatives. This also means if you have just become unemployed, the average income over 6 months might just pull you over the median income and result in ineligibility to file under Chapter 7. The best practice then would be to wait until the average falls below the median. Similarly, if you get a new job during the bankruptcy case is in progress, the dynamics can change based on circumstances.

        How does employment impact Chapter 13?

        With respect to Chapter 13, the case is completely the opposite. No income means no eligibility for Chapter 13. The stability of the job, the tenure of the employment, and the disposable income play an important factor in determining eligibility for Chapter 13. If you are unemployed and do not possess any other strong and consistent source of income, it is highly unlikely to qualify for Chapter 13. If you are unemployed but possess some additional sources of income like rent/royalty, social security benefits, nonemployment compensation, pension, etc., there is still a possibility of being eligible to file under Chapter 13. Even a sole proprietor business income could qualify as a source of income however, the eligibility ultimately shall be at the court’s discretion on the case to case basis.
        There are many ways to be eligible for Chapter 7 and Chapter 13. You need the help of the right attorney. Call +1 888-297-6203 right now for the best solution for your eligibility concerns.


          *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.

        • Basic Steps for Filing Chapter 7 Bankruptcy

          Basic Steps for Filing Chapter 7 Bankruptcy

          Filing for bankruptcy is a complex process and needs expert guidance to deal with the nuances. Call 888-297-6023 to discuss your case. Although you could file for bankruptcy without lawyer too, Dallas based bankruptcy law firm Recovery Law Group inform, it is not likely to end up with a discharge. The basic steps involved in Chapter 7 bankruptcy are:

          1. Analyzing your debt

          Before filing for bankruptcy, find out which debts will remain even after bankruptcy. These debts include student loan, child and spousal support and any recent tax debts. Any collateral pledged for debt is likely to be taken by a creditor if you fall behind on payments either when you file, during your bankruptcy case or after the case.

          1. Finding out exemptions

          Exemption laws (federal and state) allow debtors to keep some extent of the property. When you file for Chapter 7 bankruptcy, it is important to find out how much equity in the property you can keep. Household furnishings, a modest car, retirement accounts and some equity in the home are exemptions available to Chapter 7 bankruptcy filers.

          1. Checking eligibility

          Chapter 7 eligibility includes passing a means test. Your average gross income for the past six months must be less than the median income for a family of the same size in your state for you to qualify. In case the average income is above the median, your allowed expenses are deducted to find out if you can use Chapter 7 bankruptcy to get rid of your debts.

          1. Dealing with secured debts

          Secured debts like a car loan or house mortgages have collateral attached to them. If you wish to keep the property, you need to keep making payments to the creditor. However, when you file for bankruptcy you have the option to either redeem (pay the creditor the current value of the property as a lump sum amount); reaffirm (continue to make payments to the creditor as per agreement); or surrender the property. In case you remain current on your loan, an agreement can be reached with the creditor to keep your property.

          1. Dealing with bankruptcy forms

          Along with bankruptcy forms, you need to inform the court about your income, assets, expenses, debts and prior transactions, including any property transaction that took place 10 years prior to a bankruptcy filing in Dallas. You also need to provide a comprehensive list of your creditors, property exemptions and decide the course of action for your secured debts. You can file the papers by opting for emergency filing (file a few required forms) or filing all your forms including schedules together.

          1. Attending credit counseling course

          It is mandatory for people filing for bankruptcy to attend a credit counseling course and complete it prior to the filing of bankruptcy papers or shortly after that.

          1. Pay filing fee or request a waiver

          You need to pay fees for filing bankruptcy papers. If you can’t afford it, you could ask for installments, or a complete waiver. If you meet the criterion (household income less than 150% of federal poverty guidelines or insufficient income to pay installments) the judge can issue a waiver.

          1. Submit relevant documents

          You need to submit bank statements, tax returns, pay-check stubs, profit and loss statements mentioned in your bankruptcy papers to the bankruptcy trustee.

          1. Attend meeting

          You need to attend a creditors meeting with the trustee where you will be asked questions that you need to answer under oath.

          1. File objections

          In case you wish to eliminate some liens or dispute any creditor’s claim, you can address these matters before the matter closes. Courts might allow you to reopen a case if you forgot to take care of any lien.

          1. Handle secured debts

          You need to act on your secured debts as mentioned in your bankruptcy papers before the case closes.

          1. Finish debtor education course

          You need to complete the second course (debtor education course) after filing your bankruptcy papers before receiving a discharge. In case you are unable to do so, the case will be closed without a discharge.

          1. Get discharge

          A successful bankruptcy ends with the discharge of your qualified debts. You are no longer legally obliged to pay for those debts.


            *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.

          • An Overview of Chapter 7 Bankruptcy Process

            An Overview of Chapter 7 Bankruptcy Process

            If you are looking to file for bankruptcy, Los Angeles based bankruptcy law firm Recovery Law Group, suggests Chapter 7 as one of the best ways to get rid of your debts, provided you are able to qualify for the same. A typical Chapter 7 bankruptcy process consists of six steps:

            1. You are required to complete a mandatory credit counseling course before you file your bankruptcy papers. This can be one either online or by phone.
            2. You need to fill your bankruptcy forms. These are available online. Along with the forms you are expected to provide a list of all your properties, your creditors, information regarding all financial transactions that took place over the past two years.
            3. Provide your bankruptcy trustee with a copy of the latest income tax return and any other relevant documents asked by the trustee.
            4. 30 days after filing the bankruptcy papers, a creditors’ meeting is scheduled which is mandatory to attend. The meeting is conducted by the trustee in a hearing room and is attended by the bankruptcy filer, their attorney, the trustee and possibly the creditors. You are required to provide an answer (under oath) to all questions asked by the trustee pertaining to your bankruptcy case.
            5. Within 60 days of the creditors’ meeting, you are required to attend a mandatory budget counseling (online or via phone) and inform the court (by filing a form) about the completion of the course also provides a certificate of completion from the counseling.
            6. You are not allowed to operate a business with inventory or give away or sell any property without your bankruptcy trustee’s permission until you get a written discharge of your debts by the court. Usually, this takes place around 60 to 75 days after creditors’ meeting. Usually, during this time frame, the creditors can, but rarely object to your getting rid of debts. In case you have any non-exempt property, the trustee makes arrangement for turning it over so that it can be used to pay your unsecured creditors. However, most Chapter 7 bankruptcy filers do not have non-exempt property.

            The Chapter 7 bankruptcy timeline is very short.

            Prior to filing papers Mandatory credit counseling
            Filing date File papers to start the bankruptcy process
            30 days after filing papers Creditors’ meeting
            Up to 60 days after creditors’ meeting Compulsory budget counseling
            60 days after creditors’ meeting Get written discharge of your debts from court

             

            In case you are worried about your bankruptcy case, consult with expert bankruptcy lawyers at 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.

            • What Do You Understand by Disposable Income?

              What Do You Understand by Disposable Income?

              Many people find bankruptcy a great way out of spiraling debts. Consulting a bankruptcy attorney to find out which bankruptcy chapter suits your condition the best is important. However, people come across the term ‘disposable income’ too often during bankruptcy discussions and are often confused as to what it means. According to bankruptcy lawyers of Los Angeles based firm Recovery Law group, disposable income is the amount of your monthly gross income which remains after all essential bankruptcy expenses are subtracted from it.

              Disposable income is important to decide which chapter of bankruptcy you qualify; Chapter 7 to get a discharge of debts or Chapter 13. After claiming deductions, you can use the actual cost of certain expenses. Some of the deductions you are allowed include food and clothing, taxes, housing and utilities, life insurance, transportation costs, involuntary payroll deductions, spousal and child support, healthcare costs, education costs, etc. Determination of disposable income is done using forms which depend on the chapter under which you intend to file bankruptcy.

              Chapter 7 bankruptcy requires you to pass a means test. You need to complete the Chapter 7 Means Test Calculation form in this case. You find your disposable monthly income by deducting allowed expenses and multiply the amount by 60 months. In case the figure exceeds the maximum amount allowed (mentioned on the form) then you can’t qualify for the discharge. Also, if your disposable income can pay 25% or more of your unsecured debts like credit card and medical bills and personal loans, you will be able to qualify for this chapter of bankruptcy.

              Chapter 13 bankruptcy requires you to file Chapter 13 Calculation of Your Disposable Income form. The monthly disposable income is calculated after deducting expenses. This amount is used to pay off your unsecured nonpriority debts every month for 3 to 5-years as per the repayment plan.

              Since every case is different, it is important to find out which chapter of bankruptcy you qualify for. This can be done by consulting with expert bankruptcy attorneys. In case you would like to discuss your case, call at 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.

              • Foreclosure and Bankruptcy

                Foreclosure and Bankruptcy

                Foreclosure is a very stressful condition and it requires immediate assistance. Foreclosure is not always right and there can be scenarios when it can be easily prevented. A talk or a piece of advice from an experienced attorney can do wonders on most days. Log on to Recovery Law Group to reach out the best attorneys in town to help you or your friend out in case of a foreclosure. The consultation offered is not only confidential but is very professional too. Foreclosure basically means an exercise of a right by the lender to acquire, liquidate or sell off the asset has a lien on. This can happen in case of secured debts if the debtor misses multiple payments. This might also happen in case of unsecured debts under certain circumstances wherein a judicial lien or foreclosure is applied.

                What are the causes of a foreclosure?

                Foreclosure can occur due to personal or financial situations. Some of the potential reasons for foreclosure could be due to the following-

                • Divorce

                This is a very common reason for mortgage foreclosure. Due to divorce, the mortgage is no longer borne by two people but is levied on a single person, which always is a very big expense to handle with the existing paycheck. Alimony, child support, etc., can cripple the disposable income available for paying important debts like a home mortgage. So, divorce can be a very big potential reason for foreclosure.

                • Death

                As is divorce, death plays a significant role especially if it is associated with the higher earning spouse. While most of the household expenses creep up on the shoulders of a single person, it can be very difficult for one to keep up with all secured or unsecured loans pursued earlier. Apart from being a financial crisis, it can lead to an emotional breakdown which is a very difficult situation to be in.

                • Illness

                Some health disorder or too huge medical bills with large out of pocket expenses can really shake you off your financial track. Being ill will not only reduce the flow of income, cut down your pay slip, but also increase the burden on your savings and the available disposable income. Prolonged illness could also hence lead to foreclosures, bankruptcy, and similar unhealthy financial situations.

                Solutions for foreclosure

                Foreclosure is not the end of the world. It can be safeguarded and if you are worried about your residence or any other particular asset, you need not be. There are solutions to this foreclosure problem. Some of them can be listed as follows-

                • Filing for bankruptcy

                Filing for bankruptcy is a great option if you are about to face foreclosure. Not only do you get automatic stay but if you are eligible for filing bankruptcy under Chapter 13, none of your assets will be disturbed and your future disposable income will be used to settle the debts. This is one of the easy and effective formulae to prevent foreclosing.

                • Opting for judicial foreclosure

                The nonjudicial foreclosure requires a notice of at least 30 days prior initiating the foreclosure. It is important for you to make the lender understand your situation and provide a solution or a plan to pay off the debt in a suitable time frame. If the lender is not convinced, you may have to fight it out in the court and request for judicial foreclosure. There are several benefits offered for judicial foreclosure in states like California however, it proves to be really expensive for the lenders.

                Depending on the agreement terms, there can be more ways of dealing with the situation efficiently. An expert mortgage lawyer is just a phone call away from you. Don’t let foreclosure haunt you. Dial 888-297-6203 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 Much Debt is Too Much For Chapter 7 Bankruptcy?

                  How Much Debt is Too Much For Chapter 7 Bankruptcy?

                  Debt does not need any reason to pile up. One missed payment followed by another and the debt just keeps piling without your knowledge. Having too much debt is a scary thing, but sometimes, one might just land there without choice. Bankruptcy, however, can help you kickstart your life once more instead of facing undue harassment from the lenders and dissolving all your assets, it is one of the better options. Most people use bankruptcy to start fresh amongst a pile of debt that probably would not be released even after several years of hardship. How much debt will lead to bankruptcy? Should you apply for bankruptcy or not? Get all your questions answered at Recovery Law Group.

                  Where does the debt limit apply?

                  The debt has to be limited for Chapter 13 type of bankruptcy. Chapter 13 bankruptcy is a system or a code that brings together, the legal system (in the form of the bankruptcy trustee and court) and affected parties (you and the lenders) to an agreement. This agreement usually is a payment plan that lasts for about 3-5 years depending on various factors like income threshold, type of debts, etc. Since a payment plan has to be implemented, there is a limit of different types of debt (secured and unsecured) below which the debtors could be eligible to file under Chapter 13 bankruptcy. There is no limit for Chapter 7 bankruptcy and hence, if you have too much debt and do not qualify for Chapter 13, Chapter 7 is an obvious choice.

                  What counts in a Chapter 7 bankruptcy?

                  As understood recently, the amount of debt is not an issue for Chapter 7 bankruptcy filing but there are some eligibility criterions for filing the bankruptcy. The income holds the key in the case of Chapter 7 bankruptcy. If the filer has too much income that could relate to excess disposable income with some standard deductions for common expenses, the filer would most likely not qualify for Chapter 7 system code. The income to qualify for this section code should be lower than the average income of a family/person in California. This is also referred to as a ‘means’ test. This rule was passed by the Congress in the year 2005 as the credit card companies rallied for it due to the release of unsecured debts quite easily under Chapter 7 bankruptcy code.

                  Switching from one bankruptcy code to another?

                  It is important to select the right Chapter to file the bankruptcy. A qualified attorney is just a call away, who can guide you with which Chapter would be best based on your specific scenarios. Reach out to +1 888-297-6203 to select the right chapter in the first place. However, if you feel switching can help you gain a better position or save you a few dollars, you need to qualify for both Chapter 7 and Chapter 13 to do so. The most common reasons for switching or converting can be listed as follows-

                  • The process of bankruptcy could last up to 5 years in Chapter 13 while it can be almost immediate depending on the type of non-exempt assets in the case of Chapter 7. Time can be a factor why someone would like to switch from Chapter 13 to Chapter 7
                  • Mortgage or home loan can face foreclosure under Chapter 7, and you do not have so authority or control over the home However, under Chapter 13, foreclosure is more controllable and shall not be subject to foreclosure until and unless the payments are being made as per the payment plan
                  • If you did not realize you might end up losing some of your necessary assets like car, home, etc., you might want to safeguard it by switching to Chapter 13 from Chapter 7
                  • If your job is not consistent, or you fall ill too often and are on sick leave often, it might be difficult to payout the monthly payments as per Chapter 13. Loss of job and similar factors shall make you incline towards Chapter 7 a bit more
                  • Finally, you might end up paying back a good chunk of debts in full under Chapter 13 which is good but not ideal after filing for bankruptcy. This might also want you to consider for Chapter 7 switching

                  Switching fee and procedure

                  Switching from Chapter 7 to Chapter 13 is usually an easy process. There is no conversion or switching fee. Also, there is no pre-requisite for any permission; but a motion or referendum has to be passed in the court to notify about the switch. To switch from Chapter 13 to Chapter 7 there is a fee of $25. Conversion is only possible if there hasn’t been any release of debt under Chapter 7 in the recent 8 years. A motion has to be passed for Chapter 13 to Chapter 7 switch also. For all this to happen, one has to be eligible for Chapter 7 as well as Chapter 13 guidelines. In case of ineligibility to switch and ineligibility to keep up with the existing Chapter program, a filer can request the court to dismiss the case. This will release the automatic stay shelter on you, and you shall be exposed to the lender’s ways of extracting their debt from you. Expert solutions and expert guidance are just a call away. Manage your bankruptcy in the best way possible by reaching out to +1 888-297-6203 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.

                  • 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.

                    • 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.