Chapter 7 and 13 are similar in that they would discharge the same type of debt. So, consumer debt, revolving debt, medical debt, and other similar types will be discharged differently in chapter 13.
What Debt Is Not Going To Be Forgiven In A Chapter 13 Bankruptcy?
Debts that will not be forgiven under chapter 13 are taxes owed to the IRS and student loans, but everything else in bankruptcy is typically dischargeable in a 13.
What Assets Or Positions Will I Be Able To Keep In A Chapter 13 Bankruptcy?
You can keep your home if it has $150,000 of equity or less and a vehicle if it has $5,000 or less. One of the tools that a 13 would allow you to do that a chapter 7 won’t allow you to do is that often, people will have a second loan on the house. Of course, this isn’t happening a lot right now because the home values are so high but previously, when we had the problem with lowering home values, in chapter 13, if you have a second lien on your home and your home is worth less than the amount on your first lien, then you can use chapter 13 to discharge your second lien completely.
How Does A Repayment Plan Work In A Chapter 13 Bankruptcy?
The bankruptcy court will have you fill out a budget. Then, they determine the amount left after your bills are paid every month, and that is the amount they expect you to pay monthly for five years.
What Happens If Someone Defaults On A Chapter 13 Bankruptcy Plan?
Individuals who default on their payment plans are usually given a couple of chances. This is usually about three to four months of defaulting where the bankruptcy trustee starts sending us, the attorneys, warnings that they haven’t paid. And if they continue not to pay and don’t pick their payments up for about three to four months, the bankruptcy trustee will dismiss their case, and the creditors will be reinstated as if they had never filed bankruptcy.
What Are Some Of The Most Common Questions That Clients Or Potential Clients Ask You When It Comes To Bankruptcy?
Some of the most common questions pertain to whether an individual would qualify for the various chapter of bankruptcy. There are income complication steps, and it depends on whether it’s just you filing bankruptcy or whether it’s you and a spouse or the number of people in a household. I would say it surprises people when you file bankruptcy because you’re only allowed to have $300 in any one account, and anything over that, the bankruptcy court will take on the day you file bankruptcy. So there’s some planning involved there where we work with people to make sure that their account is at the lowest point when we file the bankruptcy.
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