Tag: filing bankruptcy

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Repossession of collateral (mostly a vehicle) by secured creditors can possibly be taken back through the bankruptcy filing. It is important for the debtor to file a petition for bankruptcy along with a motion for the return of the repossessed property against the creditor, as soon as possible. The creditor, repossessing the property, should be informed about the filing and the motion, immediately after they are filed. It is extremely necessary to give the notice to the creditor, as there are strong chances that the creditor might have intentions to sell the repossessed property. Thus, time plays a vital role here.

Once the court grants the motion, an order is issued for the turnover and the creditor is obliged to return the property either to the bankruptcy trustee of the debtor or to the debtor itself. However, the debtor may also be required to make some additional fees to the creditor to keep the property. An example of such a case is of Hundley, which was a case of vehicle repossession. In it, the vehicle was returned to the debtor. In addition, the court had asked the debtor to pay the fees for repossession and storage, along with making the car loan payments on time, as a part of the Chapter 13 repayment plan.

It will be better to consult an experienced bankruptcy lawyer, like the Recovery Law Group, before filing the bankruptcy petition and the motion. You can either visit Recovery Law Group or call 888-297-6203.

Getting the Property Returned

As per the turnover order under Bankruptcy Code 11 U.S.C. § 542, the creditor is supposed to hand over the repossessed property to the bankruptcy trustee. The ‘property of the estate’ is broadly defined in § 541 of the Bankruptcy Code. According to the Supreme Court and smaller federal courts, properties repossessed by the creditor, before the debtor filed for a bankruptcy petition, are all included in the ‘property of the estate’, provided the debtor had some legal interest in the property in question, at the time of filing.

A creditor can’t sell away the property immediately after the repossession, as the debtor is mostly entitled to a right of redemption, especially in Texas. There, it is necessary for the creditor to inform the debtor prior to selling the repossessed property, and the debtor must acknowledge it with an objection, within 20 days of receiving the notification.

Call: 888-297-6203

Sometimes bankruptcy can be the best way to begin one’s financial life afresh. However, the laws and processes of bankruptcy are difficult to understand and you can easily make mistakes. So, it is important to consult an experienced and knowledgeable bankruptcy lawyer like The Recovery Law Group. You can visit them at Recovery Law Group or call 888-297-6203.

Given below are five problems related to tax returns, which must be avoided before filing for bankruptcy.

1. A delay in filing the income tax returns is not advisable. Debtors, who make genuine and good attempts to follow tax laws and filing requirements, are favored more by bankruptcy courts. Bankruptcy law treats tax debts uniquely. Normally, the older tax liability is more likely to be discharged in Chapter 7 bankruptcy, provided the debtor was not involved in tax evasion.
2. Late returns can highly complicate the issue of discharge. As per the Bankruptcy Code’s definition of ‘return’, a return should satisfy all laws of non-bankruptcy and applicable requirements for filing. If the late filing won’t meet all the criteria, as per the court’s analysis, your tax debt, for that year, won’t be discharged.
   One of the examples of such a situation is the case of Van Arsdale. In re Van Arsdale, the debtor had filed the tax return after the filing of a substitute return by the IRS. Thus, the late tax return was declared a no ‘return’ under the bankruptcy code, by the Bankruptcy Court for the Northern District of California.
3. The filing of missing tax returns should not be delayed. The tax debt becomes a part of your repayment plan with other types of debts, in Chapter 13 bankruptcy. Before your first meeting with the creditors, file all the tax returns which are needed during the period of 4 years, prior to the date of your petition.
4. Remember to provide your bankruptcy trustee with a copy or transcript of your most recent tax return, a year prior to filing for bankruptcy. This shall be received at least 7 days before the creditors meeting. Also, never give away your only tax return copy to a trustee, and always keep extra copies of it, as other interested parties might also request to see it.
5. You should not disclose your date of birth, social security number, bank account numbers, and other personal data while submitting the tax returns to the court and trustee.

Remember that your tax obligations are not subjected to automatic stay after filing for bankruptcy. So, keep filing timely tax returns even after the commencement of your bankruptcy case, and also keep a track of your income and expenses.