Joel Steinberg asked:




It used to be much easier to refinance/ buyout out of Chapter 13 bankruptcy. With the subprime lending crisis it is harder for the lender to sell subprime paper. As a result many lenders went out of business, and others no longer offer a Chapter 13 buyout. However a capable mortgage lender still has the ability to help many people buyout of a Chapter 13. The chances of being successful are increased if you a) have equity in your home, b) have at least a 12 month history of no late mortgage payments and c)have been in Chapter 13 for at least a yea

There are not many lenders who specialize in this type of loan, and it is likely that you will have more success if you find one that does specialize in bankruptcy related buyouts. The loan officer will guide you through the process. This will include coordinating with a Chapter 13 attorney to get court permission. In most jurisdictions, this is not an issue,and will be granted easily.

The benefits of getting out of Chapter 13 are many and include, lower monthly payments, speedier improvement of credit,and avoiding the expense of Chapter 13, and the hidden creditor costs and attorney fees that quickly mount up.

A competent Chapter 13 refinance specialist will help you navigate through all the Mortgage Verifications that are required. He or she will know the tricks of the trade and help navigate through issues you may have such as late payments on second trusts.

It used to be common for Chapter 13 refinance. buyouts to be fixed for inly two years. These programs have, for the most part been discontinued, and now the mortgage will usually stay fixed for at least 5 years.

http://rexkaufman.vox.com/library/post/using-chapter-13-bankruptcy-to-stop-foreclosure.html

Benjamin Robert Ehinger asked:




If you simply cannot fulfill your obligations to your creditors, then you have the option to file for either chapter 7 bankruptcy or chapter 13 bankruptcy.

There is a voluntary bankruptcy, which is when you file for bankruptcy yourself, and there is an involuntary bankruptcy that is when your creditors are the ones that initiate the process of filing bankruptcy.

When it comes to voluntary bankruptcy there are two options. You can file for chapter 7 bankruptcy or you can file for chapter 13 bankruptcy. These are your options so you should know what you are doing before you file for bankruptcy.

When you file for chapter 7 bankruptcy and it is granted to you, then you will have to surrender your properties, or at least the ones that were not exempted by the law. These will be surrendered to the trustee who will liquidate them and use the money to help pay off your creditors. It does not matter if you own enough property to pay off the debts in full, they will still take the property and use as much as they can to help pay your creditors. After this process the debts will be discharged and you will not have to pay on them again.

On the other hand when you file for chapter 13 bankruptcy, it works the same except for one difference. You will have to satisfy some of the unsecured loans and other debts before they will be discharged. This will all depend on what the court decides and they will take into consideration your financial abilities in the future.

Depending on your situation and your debts will depend on whether you file for chapter 7 bankruptcy or for chapter 13 bankruptcy. Either one can be very helpful when you are so far in debt that any other option will not help.

http://rexkaufman.vox.com/library/post/the-rules-of-chapter-13-bankruptcy.html

Marcus Peterson asked:




Bankruptcy is a legally declared inability of an individual or organization to pay creditors. During the course of a bankruptcy, a debtor may ask a court to dismiss the case. If the court finds that dismissal will not harm the creditors, ordinarily a court will grant a petition to dismiss a Chapter 7 or a Chapter 13 bankruptcy.

There are several reasons a debtor may prefer to file a Chapter 13 bankruptcy petition. The reasons include the debtor wishes to resolve certain debts that may not be discharged in a Chapter 7 bankruptcy. The debtor may also wish to protect certain cosigners on personal loans from being pursued by creditors for repayment or feels obligated to repay certain debts. The debtor may believe that future creditors will look more favorably on Chapter 13 reorganization than a Chapter 7 discharge. A debtor may be required to file a Chapter 13 bankruptcy if he or she has received a Chapter 7 bankruptcy discharge within the prior six years, or obtained a Chapter 13 bankruptcy discharge within the prior six years and has not paid off at least 70% of the unsecured debts and was subject to the discharge of a prior Chapter 7 or Chapter 13 bankruptcy filing within the prior 180 days, because the debtor violated a court order, or requested dismissal after a creditor sought relief from the automatic stay.

After filing a Chapter 7 bankruptcy petition, some debtors discover that they are better served by pursuing relief under Chapter 13. By filing an appropriate motion with the bankruptcy court, the debtor has an absolute right to convert the petition to a Chapter 13 filing, if the debtor has not previously converted a Chapter 7 bankruptcy to a Chapter 13 bankruptcy, and the debtor’s estate qualifies for Chapter 13 relief.

http://chapter13bankruptcynow68.wetpaint.com/

Michael A. Goldstein asked:




Individuals who have amassed large debts have many options. However, if an individual finds that non-bankruptcy alternatives are not feasible, a decision then must be then made between filing a Chapter 7 liquidation proceeding or a debt adjustment proceeding under A Chapter 7 bankruptcy filing is best described as obtaining a discharge from debts (with some exceptions) while retaining some assets such as a home, household goods and an automobile as long as they do not exceed certain values determined by the U.S. Bankruptcy Code. Chapter 7 is consider a “liquidation” decision however if filed correctly and using the Bankruptcy Code to the best of your ability some assets can be retained while crushing debt is removed.

To be eligible to file a Chapter 7 bankruptcy the filer has to reside or be domiciled in the United States. In addition, they can not have been a debtor in a bankruptcy case in the 180 day period prior to filing the current bankruptcy case; they must receive counseling from an approved nonprofit budget and credit counseling agency prior to the filing and pass the “median family income” test. In order to receive a discharge in a Chapter 7 an individual may not have received a Chapter 7 bankruptcy discharge in the previous eight years or a Chapter 13 discharge in the previous six years.

The element which will fully determine if you can file a Chapter 7, is the “median family income” level. The individual or couple must review income made within the previous six months and average it out. If when the average income is measured against the “median family income” as stated in 11 U.S.C.

The Difference Between Chapter 7 and Chapter 13 of the Bankruptcy Code is a post from: Chapter 13 Bankruptcy Rules

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Simon Volkov asked:




Chapter 13 payments are arranged through the reorganization of debt at the time when bankruptcy is filed. The debtor is required to make regular payments directly to an assigned Trustee who oversees the case. When Chapter 13 payments are received, the Trustee disperses payments to creditors until accounts are paid in full.

In some instances, Chapter 13 payments can be made through payroll deductions if approved by the bankruptcy court. Upon acceptance of the bankruptcy repayment plan, chapter 13 payments are setup to repay creditors and tax liens, if applicable.

If the debtor owns a home, filing Chapter 13 bankruptcy can halt the foreclosure process. However, if the debtor fails out of bankruptcy, the lender has the authority to initiate foreclosure proceedings. Additionally, the court may require the debtor to liquidate their assets under Chapter 7 Bankruptcy Code. If this occurs, the debtor must relinquish their property to a Trustee who will sell the assets and repay creditors.

Chapter 13 bankruptcy is available to all U.S. citizens. This chapter allows individuals to reorganize their debt and make payments over an extended period of time. However, certain eligibility requirements must be met and include outstanding unsecured debts must be less than $307,675 and secured debts must be less than $922,975. Additionally, the debtor is required to undergo credit counseling within 180 days prior to filing.

When an individual files Chapter 13 bankruptcy they must provide a certificate of credit counseling, proposed repayment plan, proof of income, detailed list of expenses, and a recent year tax return.

Collection actions against the debtor cease when the debtor files Chapter 13. However, it does not dismiss outstanding balances. As long as payments are made to the Trustee and disbursed in a timely fashion, no further action will be taken against the debtor. If the debtor is unable to make payments according to their chapter 13 agreement, the creditors can move forward with collection actions.

If circumstances arise that cause the debtor to become unable to make chapter 13 payments, the Trustee must immediately be contacted. If the financial setback is temporary, the Trustee may agree to reducing payment amounts or extending the repayment period.

In cases where financial setbacks are long-term, the court may modify chapter 13 payments, discharge the debts on the basis of hardship, convert to Chapter 7 liquidation, dismiss the Chapter 13 case, or temporarily suspend payments.

Chapter 13 bankruptcy provides individuals with the opportunity to retain their property and make a fresh start. When creating the repayment plan it’s crucial to arrange chapter 13 payments that are reasonable so the debtor can consistently make payments in a timely fashion. Otherwise the effort will be fruitless and cause the debtor to fail out of bankruptcy and lose their home, automobile and other valuable assets.

http://rexkaufman6721.tripod.com/chapter13bankruptcynow12/index.blog/1903286/the-rules-of-chapter-13-bankruptcy/

Cole Collins asked:




While there’s no simple equation that would allow borrowers in Hawaii to figure out whether or not bankruptcy protection would be a proper fit for their own family, any consumer who finds him or herself struggling to afford the minimum monthly payments from their credit cards should at the least see what other options are available. For that matter, Hawaiian debtors who have looked at their assembled bills with a realistic and clear eyed appraisal only to discover that their household capacity for gross income in the next few years put against the family cost of living expenses and utility obligations would not allow for the elimination of the total debt load must seek out the professional services now available throughout the islands. While your authors appreciate that many of the hard working men and women of Hawaii will do everything possible to pay back the loans that they have lawfully taken out in good times and bad, waiting until the last moment in the vain hopes of some mystical deliverance from crushing financial burdens will only end in heart ache and household economic instability. Like it or not, consumer credit is a fact of life in Hawaii and most everywhere across the United States, and that is why America first initiated bankruptcy protection: to offer borrowers a fresh start. Unfortunately, Chapter 7 debt elimination bankruptcy no longer provides the same guarantees following the congressional legislation and subsequent alterations of the bankruptcy code that occurred in the fall of 2005, and many of the borrowers that fought until their last breath to right their household budget without employing high priced debt professionals only to inevitably decide upon bankruptcy protection as what they believed to be their final alternative came to find out far too late in the debt relief game that there were far more effective programs at hand. Within this article, we will explain a bit more about what personal bankruptcy protection now means to the Hawaiian borrower and what options may provide a less disastrous solution to spiraling financial obligations.

As most Hawaiian residents already know, a good portion of the average citizen’s debts would not be able to be affected by governmental bankruptcy protection. Alimony and child support and other familial debts are – and, we would agree, should be – essentially removed from all bankruptcy actions, and the same could be said for tax liens and penalties that came about as the consequence of criminal proceedings. Cash advances above eight hundred dollars that were taken out less than three months from the moment that the borrower files his or her papers run the risk of being considered fraudulent by the Hawaiian courts. Purchases of luxury goods above five hundred dollars that were taken out less than ten weeks before the time of filing face similar risks, but, obviously, there’s a good deal more leniency given the right bankruptcy attorney. Student loans, though they would seem superficially to be the same as medical bills or credit card accounts or any other unsecured debt burdens, are similarly rendered immune to bankruptcy protection after a congressional dictum from the mid 1990 (at a time when, according to some studies, a majority of the United States representatives had defaulted upon at least some portion of their own educational loans), but they tend to feature the lowest interest rates and easiest tax deductions this side of home mortgages upon primary residences. Those mortgage loans – as well as vehicle loans or any other secured debt – must be formally reaffirmed before a Chapter 7 bankruptcy could proceed (the reaffirmation meetings are generally held over the phone and should largely be considered a formality), and, in the event of a Chapter 13 debt restructure program, they may be forcibly refinanced to indulge easier payments and preclude foreclosure and forbearance which, given the sad state of Hawaii real estate during our national economic crisis, has become an all too real threat for citizens throughout our state.

Chapter 7 debt elimination bankruptcy is the oldest of all of the American bankruptcy protections, and it is still the only sort of bankruptcy that a surprisingly large portion of Hawaiians genuinely recognize. By this point in modern society, with the proliferation of credit so wide spread, there are a number of different programs meant to specifically protect everyone from family fishermen to actual cities and municipally controlled utilities, but the Chapter 7 system remains the emblem of what most people think of to be bankruptcy. Within the Chapter 7 debt liquidation program, individual consumers or married couples ask a trustee randomly selected by the Hawaiian courts to discharge all of their unsecured debts after a period of analysis that generally lasts about six months: with the recent boom in personal bankruptcies following the down turn of the Hawaiian and greater American economy, the time period may take a bit longer. Of course, nothing comes for free, and the consequences of Chapter 7 debt elimination could actually put the filer’s household in a worse situation than was previously felt. The negative repercussions of bankruptcy shall remain on the borrowers’ credit reports for up to ten years and – despite the sudden eradication of their unsecured burdens – could actively prevent the parties who are declaring Chapter 7 from home mortgages, vehicle loans, and even employment opportunities and security clearances. Much as the Chapter 7 bankruptcy alternative could erase past mistakes and forgive those debts helplessly drawn after familial tragedy, one should not necessarily think of the program as the fresh start our grandparents may have enjoyed. Credit reports are simply too important for ordinary Hawaiian consumers to disregard, and the FICO scores issued by the three primary credit bureaus (Equifax, TRW, and TransUnion) have a disproportionate effect upon Hawaiian families that some times barely understand the calculations involved.

To be sure, for some borrowers in Hawaii who have weathered lingering bouts of unemployment and have few to none assets worth preserving, Chapter 7 bankruptcies do still serve a purpose. Unfortunately, after recent legislation, the perennial guarantee of Chapter 7 bankruptcy protection and the eternal promise of household rebirth following bankruptcy no longer applies to every resident of Hawaii. As of October 17, 2005, several changes were made to the United States bankruptcy code under the Bankruptcy Abuse Prevention and Consumer Protection Act. This bill – propelled by creditor funded political action groups and sped through the U. S. Congress during a period of economic expansion with a shameful absence of media news coverage and analysis – utterly changed the parameters and liberties formerly to be considered the birthright of every Hawaiian. After the passage of BAPCA, the amount of documentation required for filing increased greatly along side the potential penalties should interested borrowers simply forget to record an essentially worthless asset or trifling bit of income. The exponentially larger penalties for fraud (or, at least, what the new federal bankruptcy code defines as fraud) were set into law just as the amount of latitude granted the Hawaii court trustee who would actually look over the debtor’s individual case was severely weakened. This heightened threat from the court system and the greater complexity of the paperwork involved with each sort of bankruptcy protection virtually demands the aid of reputable bankruptcy attorneys who have had a good deal of familiarity with both Hawaiian statutes and the national bankruptcy code.

Tragically, as the country’s economy continues to falter and more and more Hawaiian consumers beset by out of control debt feel (for right or wrong) that they have no recourse left but bankruptcy protection, the services of experienced law firms have grown harder for every Hawaiian borrower to employ and the fees that such firms feel acceptable to request have developed accordingly. Along with the administrative charges that each Hawaiian consumer will have to pay through money orders when filing their bankruptcy petition with their local county clerk, the Bankruptcy Abuse Prevention and Consumer Protection Act now necessitates that every borrower who intends to take advantage of Chapter 7 or Chapter 13 bankruptcy programs will be forced to take a course on debt management before declaration and again before balance discharge. Not only do these costs – above and beyond the sweat equity uselessly demanded of consumers likely already strapped for time; this is particularly true for Hawaiian residents who do not live within a reasonable distance from one of the handful of course counselors certified by the federal government – may already preclude many of Hawaii’s most disadvantaged citizens from employing the bankruptcy protection they so sorely need.

More troubling, following the 2005 passage of BAPCA, Chapter 7 protection became far more difficult for ordinary borrowers with a solid work history to enter and considerably more threatening for those Hawaiian consumers that successfully argue for Chapter 7 eligibility to endure. The United States bankruptcy code currently insists that any borrower formally residing in Hawaii must earn less than the median income of every head of household in the state as determined by the most recent census figures. This means that single wage earners who have a demonstrable gross income above forty seven thousand (sixty thousand for a Hawaiian household with two members; seventy thousand for a household with three members; eighty five thousand for a household with four members) in the year prior to filing for bankruptcy will find it very difficult to eliminate their collected debts through Chapter 7 protection no matter how great their burdens. If the borrower does find that they still make more than the median earnings of Hawaiian residents, there’s a slim chance that they could still convince the court trustee that (once all monthly utility bills, household expenses, and secured credit accounts are taken into consideration) they would be less than able to come up with one hundred dollars every month for a period of five years – six thousand dollars all told – and they may then be allowed Chapter 7 debt elimination. This “means test” has become far more arduous, though, since the Internal Revenue Service has outlined the costs of living for Hawaiian households with, once again, virtually no wiggle room allowed the Hawaii judge actually studying the borrowers’ financial budget, and, as consumers should presume, the IRS estimates are comically low compared to the realities of many debtor families who happen to live in the more expensive areas of Honolulu or Maui or other premium sites in Hawaii.

Even for those supposedly fortunate Hawaiian consumers that manage to pass through the ever tighter gates toward Chapter 7 debt elimination, there will still be unintended consequences as a result. In the years before the BAPCA legislation was passed, debtors in Hawaii who held significant assets knew that their most high priced possessions could potentially be seized for auction by agents of the Hawaii courts. However, average consumers – since they would only need to list their personals goods by the potential resale value – did not have much to worry about. Nowadays, as yet one more aspect of the damage to the United States bankruptcy code following the 2005 legislation which every Hawaiian consumer thinking about the Chapter 7 program must recognize, borrowers have to compile an exhaustive register of virtually every thing that they own because the items will be valued according to their potential replacement costs. Hawaiians declaring bankruptcy protection are a bit more fortunate on this point when compared to their countrymen. Local statutes designed by the Hawaiian legislature offer a different slate of exemptions with which borrowers can attempt to safe guard their most prized objects. There are still no guarantees for many household furnishings as well as family heirlooms or similarly important objects, but, compared to the minimal exemptions guaranteed by the federal government, they should be considered highly desirable indeed.

Under the Hawaiian homestead exemption, any real property of one acre or less should not be worried over unless there’s a great deal of equity (the precise amount protected will depend upon the borrower’s age), and the household furnishings – which for the Hawaiian statutes shall encompass everything from coffee machines to books and record albums to clothing and jewelry – are protected up to one thousand dollars in total; married couples should double this and most other Hawaiian exemptions. The exemptions also cover a single automobile with a blue book value of less than twenty five hundred, family burial plots along with associated structures (grave stones, monuments, etc), and the filers’ so called tools of trade: physical implements, uniform, commercial library, and vehicles such as cars and boats that could be proven to be necessary for the borrowers’ employment. Workman’s comp, disability payments, unemployment benefits, certain types of retirement plans, life and health insurance takings, and any wages earned but not yet collected by Hawaiian borrowers shall also be taken care of. Once again, when set aside the puny exemptions that have been erected by the national government, Hawaiian debtors thinking about Chapter 7 debt elimination bankruptcy are remarkably fortunate, but, when the family must decide whether to protect their couch or their wedding ring, that may seem to be cold comfort.
The bankruptcy protections that generations of Hawaiian families have depended upon have changed, utterly, and borrowers concerned about their debts should not walk blindly into bankruptcy declarations (or, for that matter, pay the extravagant sums requested by reputable bankruptcy attorneys licensed in Hawaii) without a journey of discovery that takes into account all of the various debt relief alternatives blossoming in the absence of effective bankruptcy solutions. Despite their advertisement fueled popularity around an irritatingly large percentage of Hawaiian residents, Consumer Credit Counseling companies have fallen under suspicion now that most borrowers understand that the approach has been virtually subsidized by the credit card companies for years. Beyond anything else, Consumer Credit Counseling notations look rather worse than even bankruptcy upon credit reports and FICO scores while the system charges borrowers up to four figures for little more than a temporary drop in interest rates. Also, the Consumer Credit Counseling method has the same essential flaw as secured debt consolidation loans – artificially lowering payments by extending the terms of the obligation only means that compound interest (even a relatively low rate of interest) has more time to raise balances – although consolidating consumer debt at the expense of home equity has potentially far more dangerous consequences for home owners: particularly given the current real estate value free fall.

For the right sort of borrower, any of these debt management alternatives (even Chapter 7 bankruptcy protection, weakened as the current program may be) could actually seem like a reasonable maneuver, but, when we have talked to the consumers around Hawaii that have found the most success in their attempts to liquidate unsecured debt loads, the approach that comes up time and again is debt settlement negotiations. Under the debt settlement plan, trained and certified debt analysts speak on the borrower’s behalf with credit card representatives and – through a combination of threats (since bankruptcy and the potential liquidation of all unsecured loans always remains a possibility for Hawaiian borrowers) and promises (most debt settlement companies with the best track records ensure that their clients pay back the remaining balances in less than five years) – the debt settlement negotiator will cut their clients’ debt load by as much as sixty percent. The debt settlement strategy comes with its own costs, of course, and nothing looks quite as good on a credit report as paying back the loans in a traditional manner. For that matter, since not all lenders are equally amenable to the settlement option and since many of the borrowers would sadly be unable to repay even a fraction of their collected credit card bills in a timely fashion, many Hawaiian consumers would not even be accepted into the settlement program. However, given the problems with bankruptcy that we have illustrated earlier in this article, any Hawaiian borrower worried about their bills should certainly take the time to examine the alternatives. Unlike the time spent meeting up with bankruptcy attorneys, there will be generally little if any money requested from the settlement professionals for an initial consultation, and many of our Hawaiian correspondents reported great success even from internet companies that better suited their distant location or harried schedule. The settlement solution isn’t for every Hawaiian debtor, it will not offer the fresh start Chapter 7 bankruptcy once promised, but, presuming borrowers have examined all of the alternatives, it should be well worth the time to take a look.

http://rexkaufman6721.xanga.com/700031936/the-rules-of-chapter-13-bankruptcy/

Joseph Seagle asked:




In Bankruptcy cases, specifically Chapter 11 and Chapter 13, lien stripping is an effective tool in reducing the payments made to creditors. In Chapter 13, the debtors reorganize their debts into a repayment plan whereas Chapter 11 is for businesses and individuals whose debts exceed the limits in Chapter 13.

Lienstripping is referred to as the debtors’ ability to reduce an undersecured creditor’s claim by valuation of the underlying collateral. This is also known as bifurcation where the undersecured creditor’s claim is divided into secured portion and unsecured portion. The unsecured portion of the lien is stripped away from the collateral and becomes an unsecured claim. For example, if a debtor purchased a commercial building with a mortgage of $500,000 and the current value of the building is $300,000. The creditor’s lien is undersecured and can be bifurcated into $300,000 secured claim and a $200,000 unsecured claim. The debtor is only required to pay back $300,000 over the life of the loan and the remaining $200,000 can by discharged at the end of a successful plan. Under nonbankruptcy laws, the debtor is required to pay the entire amount since lienstripping is unique to bankruptcy cases. Lien stripping is not available in Chapter 7 cases which are used in discharging unsecured debts because liens ride through Chapter 7 cases untouched.

However, there are limitations as to what the debtor can do in valuing claims on the primary residence and vehicles financed within 910 days. Congress in its wisdom has prohibited individuals from modifying loans on their primary residence. If the debtors have one mortgage on their home, they cannot reduce the loan to the value of the house. However, the debtor is allowed to strip away a second mortgage that is not secured by the value of the house. For example, if the debtor has a first mortgage of $300,000 and a second mortgage of $100,000 and the house has a value of $250,000, then the debtor is allowed to strip away the second mortgage. In Chapter 13 cases, Congress applied another limitation to stripping liens on vehicles financed within 910 days of filing bankruptcy. A vehicle that has been financed longer than 910 days can have its lien reduced to the value of the collateral which allows the debtor to make reduced payments based on the current value of the vehicle and not the outstanding balance of the loan. The interest rate can also be reduced to the current market rate and the debtor is not required to pay the contract rate.

http://rexkaufman6721.tripod.com/chapter13bankruptcynow12/index.blog/1903264/using-chapter-thirteen-bankruptcy-to-stop-foreclosure/

Michael Russell asked:




Chapter 13 bankruptcy is provided for the wage earner who can use his income to pay his creditors over a specified time period. Chapter 13 is a reorganization of the debt owed to creditors with a payment schedule set up whereby the wage earner makes timely payments to the creditors over a three to five year payment period.

The court may not allow a filing of chapter 13, depending on whether or not a person’s income is sufficient to repay some or all the debt. It has to be established with the court that the income is steady income and is not too low. Thus, chapter 13 is not suited for everyone.

Also, there is a limit to the amount of debt a person is carrying to qualify for filing a chapter 13. Total secured debt must not exceed $922,975 and total unsecured debt must not be more than $307,675. Secured debt is backed up with collateral such as a home or a car; while unsecured debt is balances on credit cards, signature loans, medical bills, etc.

Before you can proceed with filing a chapter 13, you are required to complete a course in personal financial management. This credit counseling course has to be approved by the court trustee. There is a fee for this course, but if you are unable to pay, you will receive the counseling free of charge.

The court will determine how much of your debt you will repay and you must begin those payments within thirty days after filing. These payments are usually made to the bankruptcy trustee to be forwarded on your creditors. The court may require these monthly payments be automatically deducted from your wages and sent to the trustee. Three percent to ten percent of each monthly payment is collected by the trustee as their commission. It is absolutely imperative that these monthly payments be paid and be paid on time.

Under chapter 13, there are certain debts that must be paid in full. These include child support, alimony and some tax obligations. These debts are non-dischargeable and must be paid one-hundred percent.

Bankruptcy law is a federal law; however, there are state laws pertaining to bankruptcy, so specific rules governing bankruptcy depends on the state of residence and filing.

The purpose of chapter 13 is to give a person a chance for a fresh start financially. It gives them protection from creditors by placing a hold on all asset and debt collections and provides the court time to work out a legal judgment that is accepted by all parties. However, there are consequences of bankruptcy in the form of poor credit and having to pay higher interest rates because of the bankruptcy on the credit report. Thus, bankruptcy filing should be thought through seriously and advice should be sought through an attorney.

There are alternatives to bankruptcy such as debt consolidation, out of court settlements or to just simply do nothing. If you have little income and property, then you are ‘sue-proof’, which means if anyone were to sue you, they wouldn’t be able to collect anything anyway because you have nothing they can take. The law provides they cannot take your basic necessities such as clothing, food, household furnishings, etc. Most creditors will not bother suing someone knowing there is nothing for them to get. Instead, they will write off the debt, which does go on your credit report, but will be removed after seven years.

It’s important to weigh your options before making a final decision on whether to file a bankruptcy.

http://www.zimbio.com/chapter13bankruptcynow35/articles/3/Chapter+Thirteen+Bankrupcy+Rules

Jon Arnold asked:




Only a few years ago, Congress made multiple huge changes to the bankruptcy laws which impacted how bankruptcy would be filed, and even who is eligible. For example, no longer can you file bankruptcy just because you are tired of paying your bills, but with the new laws, there is a defined set of procedures that must be followed for each chapter being filed, and your financial status will be evaluated under a microscope, where you must be approved before you can even file.

But one of the areas that was left pretty much untouched by the wide range of changes was Chapter 13 Bankruptcy. This chapter was originally constructed to prevent a home from being put on the foreclosure block. But with the massive number of foreclosures that are happening in the US today, it is unfortunate that many people still do not know that Chapter 13 Bankruptcy filing can still be used to prevent foreclosure on their home.

For the average consumer, there are three different types or chapters of bankruptcy that may be available to them, depending on their specific circumstances. The first one is Chapter 7 Bankruptcy, which is the most common type and is also sometimes referred to as a liquidation. Obviously the reason it is known as liquidation is because most of their debt is discharged by allowing the court-appointed trustee to liquidate all of their non-exempt assets. Even with this chapter, however, be aware that there are certain types of debts that cannot be discharged by going bankrupt.

Although it used more appropriate to be used by either businesses or people with substantial assets and income, another type of bankruptcy available to the consumer is Chapter 11, frequently also known as a business reorganization. This type does not wipe out debts, but rather it allows the person or business to reorganize its debt structure and make revised payments to the creditors, sometimes over a longer period of time, and sometimes also with a reduced interest rate. Creditors usually are willing to do this, since collecting their money over time and with interest is certainly better in their eyes than to have the debt wiped out completely via a different chapter.

The last type or chapter of bankruptcy available to the consumer is Chapter 13, frequently also known as the Wage Earner’s Reorganization. This type is the least expensive to file and is typically used by consumers who still maintain their ability to make their payment obligations, usually within three to five years. The total value of their assets which are classified as non-exempt is used as a basis and guideline for the amount that needs to be repaid over this period of time, as well as considering their level of income and any debts which cannot be discharged.

But what many consumers do not realize is that Chapter 13 Bankruptcy also allows property owners to stop foreclosure proceedings if they are behind on their mortgage payments. While the same can be said for the other chapters of consumer bankruptcy, Chapter 13 is particularly designed to permit the consumer to pay the delinquency in equal monthly payments for as long a period of time as 60 months (5 years). The mortgage lender has no choice but to agree to this, as long as all the other requirements and qualifications of this chapter are met.

The procedure to be qualified to file this chapter is more stringent than the others, since it involves a thorough examination of total debt and total income. No chapter of bankruptcy is any longer consider to be a “do-it-yourself” process with all the new legal requirements in place, so regardless of what chapter you are thinking about, it is strongly recommended that you consult with a qualified bankruptcy lawyer and ensure that both you and your property, combined with your specific situation, actually do qualify.

The biggest benefit that you can have with Chapter 13 bankruptcy, if you qualify and if you are facing foreclosure proceedings, is that it buys you time. That time can be used to make your current financial situation better, or it can also be used to find the right buyer for your property. If you move forward with this, keep in mind that the time you are granted with this is finite, and you need to start planning and take action NOW.

http://chapter13bankruptcynow68.wetpaint.com/page/Chapter+Thirteen+Bankrupcy+Rules+%2830%29

Steve Bingman asked:




In bankruptcy Chapter 13 mortgage foreclosure is either stopped or at least temporarily avoided.
Here’s how.

First, just in case you are not familiar with a Chapter 13 bankruptcy, it is a bankruptcy court approved payment plan where the debtor (the person filing bankruptcy) pays a bankruptcy trustee each month and then the trustee pays the debtor’s creditors.

There are several aspects of a Chapter 13 bankruptcy that work to help people facing mortgage foreclosure. The first aspect is actually applicable to all bankruptcies. It is called the “automatic
stay”.

By law, whenever anyone files bankruptcy, regardless of the type of bankruptcy, there is an immediate “automatic stay” (automatic temporary stopping) of most civil proceedings against the person filing bankruptcy. What this means is that if someone is facing mortgage foreclosure and the person files bankruptcy, the mortgage lender has to immediately stop its’ foreclosure action until it gets permission for the bankruptcy court to proceed.

In a Chapter 13, the bankruptcy court will not lift the “automatic stay” and grant the mortgage lender permission to proceed with a foreclosure until the debtor (the person filing bankruptcy) fails to make his payments to the bankruptcy trustee. As long as the debtor pays the monthly payments to the trustee and pays his regular mortgage payments, the “automatic stay” will remain in force and the mortgage lender can not do anything.

The second aspect of a Chapter 13 that works in favor of people facing foreclosure is that it allows a debtor to pay mortgage arrearage over time, normally 3 to 5 years. In most foreclosure cases, a person has not paid his monthly mortgage payment for several months and the mortgage lender demands full payment of the delinquent monthly payments (arrearage) in lump sum before the lender will consider stopping foreclosure. Most people cannot pay the lump sum.

In a Chapter 13 bankruptcy, a debtor can pay the arrearage over time. He does not have to pay it all at one time. Spreading the lump sum over time means paying smaller monthly payments until the total arrearage is paid. A creditor can object to the amount to be paid each month towards the arrearage, but once the bankruptcy court approves the payment plan, the creditor can not do anything except take the payments.

A third aspect of a Chapter 13 bankruptcy that helps people facing mortgage foreclosure is that unsecured creditors may be paid a portion or all of what is owed to them. What this is really doing is reducing the amount of debt that a person has to pay back each month. By paying unsecured creditors less each month, there is more money available with which to pay a secured creditor such as a mortgage lender. Therefore, it should be easier for a debtor to pay his monthly mortgage payment.

This is general information. If you need specific information or have any questions of any nature whatsoever, talk with a lawyer licensed in your state.

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