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  • Family Member Debts and Bankruptcy

    Family Member Debts and Bankruptcy

    There are several reasons for taking a loan from family members. Just before bankruptcy or during bankruptcy its quite common to have some loans from relatives, parents, siblings and other family members. The debts have piled up big time and before you file for bankruptcy is there something that you can do with your family member debts? The process of bankruptcy makes you list all your creditors/lenders so that may also include your friends, family members and all lenders irrespective of the debt type. Under chapter 7, if you do not have any non-exempt assets, your lenders might not get anything. The debt hence is written off or eventually settled at a nominal payment.

    The Chapter 13 payment plan will focus on prioritizing debts under the Bankruptcy code or rule. Your family members may or may not receive part or any repayment for their debts. In most situations, the unsecured credit is released as 99% of the payment plans do not cover 100% of the debts. To know more about Chapter 13 and Chapter 7 differences, check Recovery Law Group now.

    Repayment of debt, problems, and concerns

    The debt of family members and friends could be repaid after the bankruptcy situation also. But, the biggest hindrance to that could be potential taxes. Since, the debt is officially done, regarded as bad debt, repayment would be recorded as a gift. This could result in gift tax or some other legal reporting requirement. An individual can gift $14,000 per year an additional cover of $ 5.34 million which can be exhausted over the lifetime. One cannot simply manufacture loans from parents divert money to parents or family members. There is a need for proper documentation and paperwork before listing a person as a creditor before the bankruptcy court.

    When you decide to pay off your family debts before declaring bankruptcy, you are not off the hook either. This looks like an attractive option as you might end up paying nothing to your family members and friends during the bankruptcy process. However, this not a great option either. The law and court consider all creditors equally and it focuses on treating all creditors fairly. The bankruptcy trustee tracks all your financial transactions for ‘preferential transfer period’. The preferential transfer period is a bankruptcy term which is a period of 90 days before declaring bankruptcy. The bankruptcy trustee has the right to propose a reversal of any suspicious transaction of over $600 to a particular creditor. This rule prevents a borrower to transfer the debt to one or few debtors.

    Exceptions in the preferential transfer period and repayment options

    There is also an ‘insider’ term in the bankruptcy procedure. The term ‘insider’ is referring to business associates, immediate family members, friends, etc. The preferential transfer period for such people is one year. The court can claw back any loan repayment of say $10,000 8 months back, that you made to your parents for the bankruptcy procedure. Repaying any creditor or a family member just before bankruptcy is not a crime or an illegal activity. However, they won’t be able to hold that money for long once the bankruptcy procedure begins. Any sort of hidden transactions that include the transfer of assets/properties is illegal and that could certainly block any sort of release of debt whatsoever.

    Paying back your relatives, family members and friends can work only in the case of Chapter 7 bankruptcy procedure. The debtor in this scenario loses all his non-exempt assets. Also, the money earned after the bankruptcy process is completed under Chapter 7 is not under scanner as it is in the case of Chapter 13. So, paying off family debt after bankruptcy becomes a great option if Chapter 7 bankruptcy has been applied for. It is quite obvious to have loans from family members before declaring bankruptcy and everyone wants to payout their family first before all creditors. We can provide professional help to solve your bankruptcy woes legally. Just call +1 (888) 297 6203 to address all your questions and 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.

    • Can You Convert Your Bankruptcy Chapter?

      Can You Convert Your Bankruptcy Chapter?

      Filing for bankruptcy is a big decision. It is important to choose the bankruptcy chapter which can help protect most of your assets and results in the discharge of various debts. There are numerous factors involved while choosing a specific chapter to file bankruptcy. A lot of what happens to your circumstances and the time taken to discharge depends on the chapter of bankruptcy you have filed for. However, if your circumstances change, there are provisions available to switch the bankruptcy chapter. Changing bankruptcy chapter can be a complicated process.  Los Angeles based bankruptcy law firm https://bankruptcy.staging.recoverylawgroup.com/, therefore, advised that you consult a qualified attorney to get your bankruptcy discharged and get a fresh start.

      Type of bankruptcy which can be filed in California 

      Chapter 7 (liquidation bankruptcy) and chapter 13 (wage earner’s plan) are the major bankruptcy types available for consumers. In the case of chapter 7, your assets will be sorted into the exempt and non-exempt property. In the state of California, two exemption systems exist which cover different amounts of properties like home, furniture, care,  etc. System 1 exempts $75,000 and $175,000 of equity in the home and $3,060 in case of a vehicle; whereas according to system 2, you can avail $26,800 in home equity and $5,350 for your car. Due to the difference in exemption amount, it is best to work with a financial advisor or bankruptcy attorney to protect most of your assets.

      The exempt property is safe during the bankruptcy process while any non-exempt property you have is sold off to repay your loans. In the majority of cases, bankruptcy filers are able to get most of their property exempted and therefore don’t have to surrender any. The unsecured debts (credit card, etc.) are discharged after bankruptcy. With secured debts, you have the choice of making payments to keep the assets or surrendering the assets if you cannot afford to pay the debts. To qualify for chapter 7 bankruptcy, you need to pass the complicated means test which compares your income to the average income of a family your size. In case you fail to pass the means test, chapter 13 is the bankruptcy option available for you.

      In the case of chapter 13 bankruptcy, a repayment plan is devised keeping your debts, assets and average income as well as expenses. According to this plan you are expected to make monthly payments from your disposable income to your bankruptcy trustee who then distributes it amongst your creditors for a period of 3-5 years. Any unsecured debts which remain after the repayment plan are discharged. You can continue making payments for secured debts throughout and even after the repayment plan.

      The automatic stay provision is available in both chapters of bankruptcy. Thanks to it, your creditors cannot contact you to demand any payments, any foreclosure or repossession actions cease and so does wage garnishment and bank account levies. Thus you get some respite from constant creditor harassment while the court goes through the bankruptcy process.

      Converting a chapter 7 bankruptcy to Chapter 13

      Most debtors prefer chapter 7 if they are able to qualify for it. This is so because you get to keep almost all your assets, all your unsecured debts are discharged sooner since typically this bankruptcy takes less time than chapter 13. It, therefore, is difficult to comprehend why someone would convert from chapter 7 to chapter 13.

      If you wish to keep your property, you might wish to convert. Chapter 7 allows you to keep your home if you continue making regular payments on your mortgage. Any failure to do so might result in foreclosure. Any non-exempt property you have needs to be surrendered in this bankruptcy chapter. But in the case of chapter 13, you don’t have to give up any property while making mortgage payments through the repayment plan. Thus if you wish to protect all your property, chapter 13 is a better option.

      Conversion of Chapter 7 bankruptcy to chapter 13 can be done once without court approval provided that it is done in good faith. If you follow the rules and do not attempt to hide property then you won’t face any problems. Since there are no court fees involved while converting from chapter 7 to chapter 13, you are not required to pay any conversion fees. Since chapter 13 involves a repayment plan, if you do not have the income to support the repayment, your conversion won’t be permitted. In this situation, you might need to file a motion in the court.

      Converting a chapter 13 bankruptcy to Chapter 7

      All your disposable income is used to repay your creditors in this bankruptcy chapter. Debts like a child and spousal support need to be paid in full. All of this might take a toll on you. A change in circumstances like losing a job, prolonged illness, etc. can make your repayment plan slightly difficult to manage. Converting to chapter 7 might be a good option in this case.

      If you haven’t received a chapter 7 discharge within the past 8 years, you can seek to convert your bankruptcy from chapter 13 to chapter 7. If you have, bad luck! You are stuck with chapter 13. Since chapter 7 requires you qualifying the means test, you can convert your bankruptcy chapter only if you earn less than the state’s mean income. If nothing works for you, you remain stuck with chapter 13. The only recourse available is to ask for a dismissal of your case, which has serious consequences like losing the automatic stay benefit. What’s more is that if you ever file for bankruptcy again, the automatic stay benefit might not be readily available for you. You will be handling your creditors on your own without the help of any bankruptcy court. Conversion from chapter 13 to chapter 7 has a conversion fees of $25 which has to be deposited when you file for a motion in the court.

      Should I convert my bankruptcy chapter?

      Sometimes the court might force you to convert your bankruptcy chapter from 13 to 7. This can happen if you don’t get your payment plan approved or miss making payments on it. Any unnecessary delay in the case which can harm your creditors can also be the reason for the conversion of your bankruptcy chapter. If a discrepancy is observed in your means test and it is found that you don’t qualify for chapter 7 bankruptcy, then your bankruptcy chapter will be converted.

      Since the conversion of the chapter is a complicated process involving a number of motions, forms, and schedules, it is important if the process is handled by competent bankruptcy attorneys. Discuss with your attorney whether conversion of bankruptcy chapter might be beneficial for you. You can call 888-297-6203 for a consult regarding your bankruptcy 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.

      • Are You Filing for Bankruptcy? What Happens to Your Mortgage?

        Are You Filing for Bankruptcy? What Happens to Your Mortgage?

        Bankruptcy court acts as a shield between you and your creditors to provide you breathing space and a fresh financial start. Though the law is designed to provide respite to you, it does not do so at the cost of your creditors. You need to pay for your secured loans like mortgages. One of the best aspects of bankruptcy filing is the automatic stay which prohibits all sorts of collection actions against you. Thanks to it, your home and car cannot be foreclosed or repossessed. In case repossession is done, they have to return it. Moreover, any liens cannot be placed on your home, no wage garnishments, etc. can be done.

        For mortgages, you need to ensure that you file for bankruptcy before the home is sold. The sale can be stopped, even if an auction is scheduled if you timely file for bankruptcy. Despite the power automatic stay has, Dallas based bankruptcy law firm Recovery Law Group enlighten, that creditors can have the stay lifted if you default on making mortgage payments. In case the creditors get their say in court, the bank can continue with foreclosure proceedings.

        While filing for bankruptcy you need to be sure whether you wish to keep your home or let it go. In case you decide on leaving your home, you can stop making mortgage payments. In this case, the automatic stay will be lifted and banks can sell your home. In case your home was foreclosed without bankruptcy and sold for less than what you owe, you might have to pay the difference (also known as the deficiency). Opting for bankruptcy saves you from paying the deficiency. If you wish to keep your home, you need to choose the bankruptcy chapter carefully (Chapter 7 or Chapter 13).

        Mortgages in Chapter 7

        Your assets are classified into an exempt and non-exempt category. The non-exempt assets are surrendered which are subsequently sold to pay off the creditors. Any unsecured debts which remain after the process are discharged. Different states have different sets of exemption. In California, under Set 1 exemption, you can protect home equity between $75,000 and $175,000, while in Set 2 exemption, home equity up to $26,800 can be exempted. The equity is calculated as the amount borrowed for the purchase minus what you owe for the property. In case your home equity is not covered under the exemptions, you will find it difficult to keep it. If the equity is covered under exemptions, you might be able to keep your home as long as you make regular payments for it. You are also required to “reaffirm” your mortgage debt. Once you reaffirm the debt, it cannot be discharged even after bankruptcy.

        Mortgages in Chapter 13

        This chapter of bankruptcy involves a repayment plan which lasts for 3-5 years. Any unsecured debts which remain are discharged after the end of that period. If you wish to keep your home, you can include your mortgage payments in your repayment plan. Similar to chapter 7 bankruptcy, you might need to reaffirm your debts in this case too.

        Other mortgages

        In case your financial situation was worse and you had to take other mortgages on your home, you won’t be able to discharge second or third mortgages on your home or any home equity loan in a Chapter 7 bankruptcy if you want to keep your home. In the case of chapter 13, if your home is underwater, you might get a second mortgage or home equity line of credit discharged. The circumstances of discharge of the second mortgage depend on your circumstances and the judge.

        While struggling with debt, it is important for people to make a conscious decision whether they wish to keep their home and if they do so, can they afford to make payments for it? In case of bankruptcy, any liability for deficiency in case of foreclosure is stricken, especially if your home is underwater. Though the prospect of losing your home is overwhelming, you need to make a decision with your income and assets in mind. An adept bankruptcy lawyer can help you make aware of the various options available when you file for bankruptcy. In case you wish to have a consultation regarding your debts, you can contact 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.

        • Hire Bankruptcy Lawyers to Defend You against Creditor Action

          Hire Bankruptcy Lawyers to Defend You against Creditor Action

          Filing for bankruptcy is one of the last resort people opt for, though it is the best legal option available to get rid of genuine monetary issues plaguing people. Many times people who have filed for bankruptcy might end up getting sued by the creditors for failure to make payments. In case, you have chosen to file without a lawyer (pro se) you might not be adequately prepared to handle such a scenario.

          In a case concerning Chapter 7 bankruptcy, the debtor prior to filing for bankruptcy had opened a home equity line with a local financial institution. When the news of the filing reached the creditor, the institution filed a lawsuit against the debtor.

          The financial institution (Parkway Bank & Trust) based their lawsuit on the fact that the debtor (Casali) had knowingly sought to misdirect the bank when he decided to ask for relief from the loan. As per the bank, one of the debts should be considered non-dischargeable as per U.S. code 523(a)(2)(A). According to Dallas based law firm Recovery Law Group, the code states that bankruptcy cannot provide respite to the filer from any debt (in form of finance, property, or any other service) obtained due to lies or false depiction. According to the complaint filed by Parkway Bank & Trust, Casali had not accurately provided statements of the financial situation while borrowing money from them.

          Thankfully, expert bankruptcy lawyers by the defendant’s side argued that Parkway Bank & Trust could not provide relevant evidence to prove the charges against their client. Inability to prove without any doubt that Casali had knowingly and with dubious intent hidden the financial condition while obtaining the mortgage loan from Parkway Bank & Trust resulted in relief for the client. The case was reviewed by the bankruptcy court and the client got respite by having the loan discharged under Chapter 7 bankruptcy.

          In case you are going through a tough phase and are looking for bankruptcy as an option to get relief from the huge debts it is important to consult an adept bankruptcy lawyer. Call at 888-297-6023 to talk to expert bankruptcy lawyers to get a better grasp on your financial and legal matters. With an experienced team by your side, any complicated legal matter can be easily resolved.


            *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.

          • Factors to Consider Ahead of the Bankruptcy Filing

            Factors to Consider Ahead of the Bankruptcy Filing

            Filing of bankruptcy can be an immediate decision. However, remember that there are certain factors to be seriously considered if you are determined to file for personal bankruptcy. Whether it is to be believed or not, these below actions by the debtors just ahead of the procedure of bankruptcy filing can invite a lot of scrutiny from the bankruptcy trustee who will be assigned to the filed petition. Let’s see what can cause the debtors trouble –

            1. Taking a cash advance while you are amidst financial crisis and on the verge of filing bankruptcy can land you into trouble. This act might be treated as fraudulent activity and will invite more investigation once the case will be reviewed. In most cases, a significant portion of this cash advance needs to be paid back once the debtor files for bankruptcy
            2. If you are paying off a family member when you are about to file bankruptcy can be investigated too. Because you owe them money, it makes them equal to any other creditor in your bankruptcy case. Paying them off during the time of bankruptcy case will also not be permitted
            3. Don’t retitle or transfer assets when you are thinking about bankruptcy. It will be treated as an attempt to protect your assets from liquidation, especially in a Chapter 7 bankruptcy. It could have the counter effect leading to the bankruptcy trustee taking possession of it. Debtors should ideally consider other ways of protecting their assets instead of trying to transfer them to others.

            A proper plan is always needed in the midst of challenging times of financial crisis and if you are considering a bankruptcy filing. Work with experienced attorneys at Recovery Law Group, who can explain the laws that govern your states and warn you about actions that could cause you trouble. They can also guide you with the processes to appropriately protect your asset. Seek an appointment with them over the phone (Dial-in: 888-297-6203). An experienced bank attorney, either from their offices in Los Angeles or from Dallas, will clarify all your queries just ahead of your bankruptcy filing.


              *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.

            • Why Do You Need Legal Guidance for Filing Chapter 7 Bankruptcy in Los Angeles?

              Why Do You Need Legal Guidance for Filing Chapter 7 Bankruptcy in Los Angeles?

              Sometimes, debt reorganization, repayment plans, etc. are not enough to get rid of the overwhelming debt accumulated by people. For such individuals, Chapter 7 bankruptcy is the only solution available. This type of bankruptcy is also known as liquidation bankruptcy, wherein the non-exempt property of the individual is sold off and the money so generated is distributed among creditors. After this, lawyers of Los Angeles based law firm Recovery Law Group clarify that any remaining debts are discharged.

              Considering the complexity of cases, it is vital that you consult adept bankruptcy lawyers to help you out in Chapter 7 bankruptcy filing. Many times, clients do not have any non-exempt assets, i.e. they get to keep all their property/assets. The primary task of a bankruptcy attorney is to evaluate the debt, assets, as well as income of the debtor to find out whether Chapter 7 is indeed the best debt relief solution for them or they, should opt for Chapter 11 bankruptcy. Not every debtor can file for Chapter 7 bankruptcy as they are required to qualify a means test. In this test, the income of the debtor is assessed. In case it is below the state median, they can file for Chapter 7 bankruptcy. If it is above the mean income in the state, they need to undergo credit counseling with an approved agency.

              What Happens If You Qualify for Chapter 7 Bankruptcy?

              If you are able to qualify the means test for Chapter 7, bankruptcy lawyers guide you through the entire process. In this particular bankruptcy, a court-appointed trustee gathers all non-exempt assets of the debtor and sells it. In the state of California, 2 sets of exemptions are available; California Code of Civil Procedure Sections 703 & 704. At a time, the debtor can choose from either of the two sets in his/ her bankruptcy case. Taking the help of your attorney can provide you the necessary guidance.

              Different assets that are exempted, either entirely or in part are listed below:

              • Tools of trade
              • Insurance policies
              • Clothes and personal effects
              • Jewelry
              • Vehicle equity
              • Homestead equity
              • Ordinary household goods (appliances, furniture, )
              • Retirement plans
              • Worker compensation or any income generated from a personal injury claim
              • Other assets

              Any assets apart from those listed above can be sold by the trustee and payments made to creditors as per the Bankruptcy Code. Any debt that remains after the liquidation of asset is discharged. However, it is important to remember that certain debts cannot be discharged. These include:

              • Some Government taxes
              • Spousal and child support
              • Few Education loans
              • Some criminal restitution debts
              • Certain personal injury debts

              Chapter 7 bankruptcy is an intricate process, however, with a skilled bankruptcy attorney by your side can make things relatively easy. The bankruptcy lawyers are adept at handling cases and can help you keep maximum assets, with bare minimum going for liquidation. Many times, debtors can keep all their assets while receiving a discharge simultaneously. It is important to have an honest conversation with your lawyer regarding your financial situation so that they can help devise legal ways for you to get a fresh start. Chapter 7 bankruptcy can be an excellent way to get rid of your debt problems and stop foreclosure, repossession, wage garnishment, bank levies as well as threatening phone calls from creditors.


                *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 is The Difference between Chapter 7 and Chapter 13 Bankruptcy?

                What is The Difference between Chapter 7 and Chapter 13 Bankruptcy?

                Falling behind on payments can have drastic results. You are almost never able to come out of the vicious cycle of dues and payments. Bankruptcy can help you come out of grave financial situations. However, it can be quite confusing as there are a number of chapters under which individuals or organizations can file for bankruptcy. It is therefore important to consult a bankruptcy attorney to help you, who can guide which chapter will provide you better options. Bankruptcy lawyers, such as those of Los Angeles based law firm Recovery Law Group can help you understand the difference between Chapter 13 and Chapter 7 bankruptcy.

                Advantages of Chapter 7

                This type of bankruptcy is known as straight bankruptcy and helps in discharging of any unsecured debts. The benefits include –

                • All unsecured debt including credit card bills, utility bills, medical bills or personal loans and any advances on pay-cheques are eliminated.
                • You are able to get a faster discharge (between 3-4 months) from the bankruptcy
                • You are able to keep your assets as per state exemption laws.
                • You can avoid monthly payments as your debts are discharged.

                Considering the advantages of Chapter 7 bankruptcy, you can consult a bankruptcy attorney and weigh the pros and cons before filing under it.

                Advantages of Chapter 13

                In this type of bankruptcy, your debts are consolidated and restructured so that you can make monthly payments over a 3-5 year period.

                • All secured and unsecured debt is consolidated.
                • You can delay as well as avoid foreclosure.
                • Creditor harassment is stopped.
                • Co-signers of any debt are protected.
                • You get a chance to show your creditors that you can make timely payments.

                These monthly payments to bankruptcy trustee go a long way in rebuilding your credit. Any unsecured debts remaining after repayment plan are discharged.

                It is important to consult adept bankruptcy lawyers to understand the difference between different bankruptcy chapters as well as finding out the one which is best suited to your situation.


                  *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 you need to know about Chapter 7 and Chapter 13 bankruptcy

                  What you need to know about Chapter 7 and Chapter 13 bankruptcy

                  Infection, divorce, foreclosure, and process loss—nearly every person will revel in this sort of problems in some unspecified time in the future for the duration of their lifetime, or even several right away. if you’ve ever found yourself in this sort of state of affairs—or are in it now—you then realize that debt can pile up fast, fast putting a person or circle of relatives in a challenging monetary function. without a protection internet, it’d be tough for many to get a return on their ft.

                  Bankruptcy affords a solution by using giving people saddled with good sized debt the possibility to get out from beneath it even as treating creditors in a fair manner. once whole, a debtor (the man or woman filing for financial disaster) will frequently describe the comfort that comes with an easy financial plate as a “clean start.” They get to begin over without the looming burden of unpaid payments.

                  For the most element, financial disaster falls into certainly one of two kinds—liquidation or reorganization.

                  Chapter 7 bankruptcy – In alternate for wiping out qualifying debt, you ought to agree that the trustee can take and liquidate (promote) a number of property to pay returned debt. but, you could hold (exempt) assets included underneath nation regulation.

                  Chapter 13 bankruptcy. – Chapter 13 financial disaster reorganizes debt for high-profits earning people (even though it is to be had to others, too). even though you can hold all of your property, you ought to pay lenders the value of any nonexempt property as part of a three- to 5-12 months bankruptcy 13 bankruptcy price plan as well as any extra discretionary earnings (as decided via the financial disaster policies).

                   

                  Chapter 7 Bankruptcy

                  In a bankruptcy 7 case—the type of financial disaster most often related to a sparkling begin—the debtor receives specific money owed—together with credit card balances, scientific bills, and personal loans—wiped out in a streamlined process without paying right into a month-to-month reimbursement plan.

                  In exchange, the debtor consents that the bankruptcy trustee—the person accountable for overseeing the case—can sell sure property, referred to as nonexempt belongings. The trustee then distributes the sales proceeds to lenders in step with a priority rating system.

                  A debtor doesn’t need to give up all assets, however. You’ll be able to exempt (keep) the things essential to maintain running and retaining a home, together with household fixtures, clothing and a small quantity of equity in a vehicle. Many filers can maintain all in their assets. each kingdom decides what its citizens can preserve.

                  A chapter 7 bankruptcy gained discharge all debt, however. some debt—known as nondischargeable debt—stays with you even after bankruptcy (and in the end, until you pay it off). Examples of nondischargeable debt include:

                  • home help obligations, which include infant and spousal support
                  • profits taxes incurred inside the closing 3 years (and once in a while older taxes, too)
                  • harm or wrongful demise awards stemming from working a vehicle whilst intoxicated, and
                  • student loan debt (unless you could display that it might be unfair to require reimbursement).

                  Each individual (customers) and agencies can report for bankruptcy 7 financial ruin. A bankruptcy 7 bankruptcy generally lasts 4 to six months.

                  Important Aspects of Chapter 7 Bankruptcy

                  Here are some of the key points you’ll want to remember.

                  Eligibility. Not anyone can record and get hold of a discharge underneath this bankruptcy. for instance, if a maximum of your debts are purchaser money owed (in place of enterprise financial ruin debt), and your disposable income is enough to fund a bankruptcy thirteen repayment plan after subtracting sure allowed fees, you may not be allowed to apply chapter 7 financial ruin. You’re additionally constrained to discharge every 8 years. For extra in this and other necessities, see chapter 7 bankruptcy — Who Can record?

                  Property. You’ll be able to exempt the vital property needed to work and keep a domestic inclusive of garments, some fairness in a automobile, and family furniture. Many borrowers who record for chapter 7 bankruptcy discover that all of their belongings is exempt underneath relevant country exemption laws (and on occasion federal exemption legal guidelines). To examine extra, see financial ruin Exemptions in chapter 7.

                  Secured debt. If you owe money on a secured debt, along with a loan or car mortgage, you’ll have a preference of permitting the creditor to repossess the property (and discharge the debt) or, in case you’re modern on your bills, keeping the belongings and persevering with to make your payments under the agreement.

                  Nondischargeable consumer debt. Financial disaster works well to put off many debts owed through people, consisting of credit card balances, scientific payments, and personal loans. but, some debt, consisting of home guide responsibilities and modern-day earnings tax payments, can’t be wiped out in bankruptcy. For more facts, see What financial disaster Can and cannot Do.

                  Nondischargeable business debt. Bankruptcy doesn’t wipe out debt owed by way of a commercial enterprise. It’s rare for a enterprise (apart from a sole proprietorship) to document for chapter 7 bankruptcy because in most cases, more green approaches to wind down the commercial enterprise exist. This chapter works properly whilst the proprietors need the bankruptcy trustee to sell and distribute assets to lenders in a transparent manner. but, there are several ways owners can locate themselves individually chargeable for the commercial enterprise debt. contact an attorney in case you’re thinking about submitting a commercial enterprise financial ruin.

                  Chapter 13 Bankruptcy

                  In Chapter 13 bankruptcy, or “wage earner” bankruptcy, you ought to have a reliable supply of profits to pay off some portion of your debt.

                  Repayment. You’ll endorse a repayment plan that details how you are going to pay returned your money owed over 3 to 5 years. The minimum quantity you’ll should pay off relies upon on how much you earn, how a great deal you owe, and the cost of your nonexempt assets. See The bankruptcy thirteen reimbursement Plan for in-intensity facts.

                  Debt limits. You can’t have greater than $1,257,850 in secured debt and $419,275 in unsecured debt (as of April 2019).

                  Mortgage and car payment arrearages. Many human beings use the chapter 13 bankruptcy compensation plan to capture up on late residence and vehicle payments and keep away from repossession or foreclosure. For greater facts, go to your private home and loan in bankruptcy thirteen financial disaster and decreasing Loans and Non-Residential Mortgages in chapter 13 financial ruin.

                  Other Types of Reorganization Bankruptcy

                  Further to bankruptcy thirteen bankruptcy, there are  other kinds of reorganization financial ruin: Chapter 11 and Chapter 12.

                   Chapter 11 bankruptcy. Chapter 11 financial ruin is generally used by financially struggling businesses to reorganize their affairs. it is also to be had to people whose debt exceeds bankruptcy 13 thresholds. in case you are considering bankruptcy 11 bankruptcy, you’ll want to talk to a attorney.

                  Chapter 12 bankruptcy. Chapter 12 is similar to bankruptcy 13 bankruptcy. but to be eligible for bankruptcy 12 financial disaster, as a minimum eighty% of your debts need to rise up from the operation of a family farm or fishery. in case you’re interested in this financial disaster type, you need to talk over with a lawyer.


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                    *Do you own a home?

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                  • Bankruptcy is a Powerful Tool for Debtors

                    Bankruptcy is a Powerful Tool for Debtors

                    If you’re dealing with extreme debt troubles, submitting for financial ruin can be a powerful remedy. It stops maximum collection moves, inclusive of telephone calls, salary garnishments, and complaints (with a few exceptions). It additionally eliminates many kinds of debt, together with credit score card balances, clinical bills, personal loans, and more.

                    However it doesn’t stop all creditors, and it doesn’t wipe out all obligations. as an example, you’ll still need to pay your pupil loans (except you could show a hardship) and arrearages for child support, alimony, and maximum tax debts. examine on to examine more about the matters that financial ruin can and can’t do.

                    What Bankruptcy Can Do

                    Bankruptcy lets in people struggling with debt to wipe out sure obligations and get a fresh begin. the 2 primary financial ruin kinds filed—chapter 7 and bankruptcy 13 financial disaster—each provides different blessings, and, in some cases, treat debt and property otherwise, too. You’ll pick out the chapter that’s right for you relying on your income, belongings, and dreams.

                    Here are some of the things you can expect bankruptcy to do.

                    Stop Creditor Harassment and Collection Activities

                    After you document, the court places in place an order known as the automatic life. The live stops maximum creditor calls, salary garnishments, and lawsuits, however now not all. for example, lenders can nonetheless acquire support bills and crook instances will continue to continue ahead.

                    Stop a Foreclosure, Repossession, or Eviction (at Least Temporarily)

                    The automatic stay will stop all of these actions as long as they’re still pending.

                    Evictions. An eviction that’s nonetheless inside the litigation method will come to a halt after a financial ruin filing. but the stay will possibly be temporary. remember the fact that if your landlord already has an eviction judgment towards you, a bankruptcy won’t assist in most people of states. (research greater in Evictions and the automatic stay in financial disaster.)

                    Foreclosure and repossession. Even though the automatic stay will prevent a foreclosure or repossession, filing for bankruptcy 7 gained assist you to hold the belongings. If you may carry the account current, you’ll lose the house or vehicle once the live lifts. by way of comparison, bankruptcy thirteen has a mechanism a good way to will let you trap up on past bills so you can preserve the asset. (See financial ruin’s automatic live and foreclosure and vehicle Repossession & bankruptcy.)

                    Wipe Out Credit Card Debt and Most Other Nonpriority Unsecured Debts

                    Financial ruin is very good at wiping out unsecured credit card debt (the debt is unsecured in case you didn’t promise to give lower back the bought property if you didn’t pay the invoice), medical payments, late application payments, personal loans, fitness center contracts. (when you have a secured credit card, together with from a jewelry, furnishings, or electronics shop, you’ll deliver the purchased item again.) In reality, submitting for bankruptcy can wipe out most nonpriority unsecured money owed other than college loans.

                    How quickly your debt will get wiped out will depend on the chapter you file:

                    Chapter 7 bankruptcy. This bankruptcy takes a mean of  3 to 4 months to complete. (study more on your Debt in chapter 7 financial ruin.)

                    Chapter 13 bankruptcy. In case you file for chapter thirteen in preference to chapter 7, you’ll probably have to pay lower back some part of your unsecured money owed thru a 3- to the 5-yr compensation plan. however, any unsecured debt stability that remains after completing your compensation plan can be discharged. (See Your money owed in chapter 13 bankruptcy.)

                    Wipe Out Secured Debt (But You’ll Have to Give Up the Purchased Property)

                    If you couldn’t afford a charge that you secured with collateral—consisting of a mortgage or vehicle payment—you can wipe out the debt in bankruptcy. however, you received It be capable of hold the residence, automobile, pc, or different item securing price of the mortgage (extra underneath beneath “What bankruptcy Can’t Do”).

                    What Only Chapter 13 Bankruptcy Can Do

                    Chapter 7 and thirteen every provide particular solutions to debt problems. chapter 7 is in most cases for low-income filers, and consequently, it received help you hold assets if you’re at the back of on payments. but, if you have the income to pay at the least something to lenders, then you definitely be capable of taking benefit of the additional blessings offered by means of chapter thirteen.

                    Here are some of the things that Chapter 13 can do.

                    Stop a mortgage foreclosure. Submitting for chapter 13 bankruptcy will stop a foreclosure and force the lender to accept a plan that will let you make up the missed bills over time (you’ll additionally stay contemporary on your normal month-to-month bills). To make this plan paintings, you must be able to exhibit that you have enough income to aid the sort of repayment plan. (For greater data, see your house and loan in chapter thirteen bankruptcy.)

                    Allow you to keep property that isn’t protected with a bankruptcy exemption. No person gives up the whole lot that they very own in bankruptcy. You’re allowed to protect (exempt) gadgets you’ll want to paintings and stay using financial disaster exemptions. A bankruptcy 7 debtor gives up nonexempt assets, however no longer a chapter thirteen filer. This doesn’t imply which you get to maintain extra belongings, but. You’ll want to pay the value of any nonexempt assets on your creditors on your reimbursement plan.

                    “Cram down” secured debts when the debt balance is more than the value of the property that secures them. Chapter 13 has a procedure that lets in you to reduce a debt to the substitute price of the belongings securing it (however you’ll repay the debt in full thru your plan). for instance, in case you owe $10,000 on an automobile mortgage and the auto is really worth most effective $6,000, you could suggest a plan that will pay the creditor $6,000 and discharge the rest of the loan. however, exceptions exist. for instance, you can not cram down a vehicle debt if to procure the auto at some stage in the 30-month length before you filed for financial ruin. also, you received be capable of use the cramdown provision at the loan of your residential domestic. (To research extra about cramdowns, test out reducing Mortgages and Loans in bankruptcy 13 (Cramdowns).

                    What Bankruptcy Can’t Do

                    Bankruptcy doesn’t cure all debt problems. Here’s what it can’t do for you.

                    Prevent a secured creditor from foreclosing or repossessing property you can’t afford.  A bankruptcy discharge gets rid of money owed, but it doesn’t take away liens. Alien permits the lender to take belongings, sell it at public sale, and practice the proceeds to a mortgage balance. The lien stays at the belongings until the debt gets paid. when you have a secured debt (a debt in which the creditor has a lien on your home), bankruptcy can cast off your obligation to pay the debt, however, it won’t take the lien off the property—the creditor will still be capable of getting better the collateral. as an instance, in case you report for chapter 7 financial ruin, you can wipe out a domestic mortgage; but, the lender’s lien will stay on the house. as long as the loan stays unpaid, the lender can foreclose on the house (as soon as the automatic live lifts, of course).

                    Eliminate child support and alimony obligations.Infant help and alimony responsibilities continue to exist bankruptcy so that you’ll maintain to owe those debts incomplete, simply as if you had never filed for bankruptcy. And if you use chapter 13, you’ll have to pay this money owed in full via your plan.

                    Eliminate student loans, except in very limited circumstances. Student loans can be discharged in financial ruin best if you could show that repaying the loan could purpose you “undue difficulty,” that’s a totally hard wellknown to fulfill. You have to show that you couldn’t have enough money to pay your loans presently and that there’s little or no chance you could accomplish that inside the destiny. (For details on the undue hassle popular, see scholar loan Debt in financial ruin.)

                    Eliminate most tax debts. Removing tax debt in a financial disaster isn’t smooth, however, it’s once in a while possible for older unpaid tax money owed. (discover the requirements in casting off Tax money owed in financial ruin.)

                    Eliminate other nondischargeable debts. the subsequent debts aren’t dischargeable under either chapter:

                    • money owed you neglect to list on your financial disaster papers (except the creditor learns of your financial disaster case)
                    • money owed for personal injury or death due to intoxicated using, and

                    fines and penalties imposed as a punishment, including traffic tickets and crook restitution.

                    – if you file for bankruptcy 7, this money owed will stay when your case is over. In bankruptcy thirteen, you’ll pay this money owed in full thru your reimbursement plan.

                    Debt related to fraud might, or might not get eliminated. A fraud-related debt won’t be discharged if a creditor files a lawsuit (called an adversary proceeding) and convinces the judge that the debt ought to continue to exist your financial ruin. Such money owed is probably the end result of mendacity on a credit utility or passing off borrowed assets as your very own to use as collateral for a loan. (analyze more in what’s financial disaster Fraud?)


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                      *Do you own a home?

                      Are you currently working?

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                    • Getting out of Debt has Never Been Easier!

                      Getting out of Debt has Never Been Easier!

                      Financial problems which seem to be spiraling out of hand are not uncommon. There are many rowing in the same boat. In case you find yourself overwhelmed with the enormous debt, you need to find a solution at the earliest. Since most creditors and debt collectors want you to remain under debt, they will never let you know that bankruptcy is one of the best solutions for huge financial debts. You need to consult a bankruptcy attorney to find out which alternative suits your condition best.

                      Chapter 7 Bankruptcy

                      People who find themselves buried under a huge debt due to credit card bills, medical bills or any other unsecured debt can get a fresh start through Chapter 7 bankruptcy. In most Chapter 7 bankruptcy cases, an automatic stay is put in effect as soon as the case is filed. This is the biggest asset as it puts a freeze on all collection initiatives taken by creditors and debt collectors including foreclosure, repossession, wage garnishment and even threatening phone calls and letters. This is the biggest relief one could get as these collection and harassment initiatives take a toll on debtors.

                      Getting a discharge order in Chapter 7 bankruptcy case (within 4-5 months of filing) eliminates most of the unsecured debts (credit card debt etc.). In case collection agencies or creditors try collecting that money, they will be violating court orders which is a punishable offense.

                      Chapter 13 Bankruptcy

                      Apart from Chapter 7, other alternatives are also available. People having a large income, many secured debts and high-value assets cannot opt for Chapter 7 bankruptcy. For such people, Chapter 13 is the available alternative. In this case, a 3-5 year repayment plan is devised which allows individual debtors time to catch up on due amounts without any harassment from collection agencies or any mounting dues, repossession or foreclosure threats. Post the repayment plan, any unsecured debts that remain are eliminated.


                        *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.