Chapter 13 of the Bankruptcy Code contains many useful provisions that are not available to Chapter 7 debtors. One of the most useful is the ability to cram-down an over-secured auto loan to the actual market value of the vehicle, and pay the auto loan over the duration of the Chapter 13 bankruptcy plan.
The Bankruptcy Code recognizes that a lien is only secured to the extent of the value of the property. If the amount of the lien is more than the value of the property, the debt is separated into two parts: secured and unsecured. During a Chapter 13, the amount of the loan that exceeds the value of the vehicle can be stripped away.
For instance, if your vehicle is worth $10,000, but the secured auto loan balance is $13,000, the bankruptcy will separate the auto loan into a secured debt of $10,000 and an unsecured debt of $3,000. The secured portion must be paid in full during the Chapter 13 case, and the unsecured $3,000 amount will be paid along with other unsecured creditors (usually pennies on the dollar, if anything).
Another potential benefit to the Chapter 13 debtor is that the contract terms can be modified during the Chapter 13 repayment period. In some cases the repayment period can be lengthened or contract interest rate can be lowered by the bankruptcy court. Changing the contractual terms can make a significant difference in the ability of the debtor to repay the debt.
If you are struggling with debts you cannot pay and own a vehicle that is worth less than you owe, you may be eligible to reduce your principle and your monthly payment on your vehicle loan. Speak with an experienced bankruptcy attorney and discuss how a Chapter 13 bankruptcy can help you reduce your debt and make your finances work for you and your family.
Showing posts with label unsecured debt. Show all posts
Showing posts with label unsecured debt. Show all posts
Friday, November 5, 2010
Monday, October 25, 2010
How Much Debt Do I Need To File Bankruptcy?
There is no qualifying minimum debt limit for an individual bankruptcy. Debtors who otherwise qualify for Chapter 7 bankruptcy can file with any amount of secured or unsecured debt. The purpose of a Chapter 7 bankruptcy is to provide the debtor a fresh start without the burden of overwhelming debt. In some cases this debt may be objectively very small (perhaps only a few thousand dollars), but it be relatively very large to a person on a fixed income from retirement, disability, or otherwise.
In cases where the amount of dischargeable debt is objectively small, both the bankruptcy attorney and the client should take care to consider all of the consequences of filing. First, bankruptcy is not cheap. There is a court filing fee, a credit counseling fee, a personal financial management course fee, and, of course, your attorney’s fees. In some extreme cases some or all of these fees may be waived. Second, a bankruptcy filing can significantly impair the debtor’s ability to borrow money and obtain credit, at least for the short term. Finally, non-exempt property may be at risk. For many poor debtors, these consequences have little, if any, affect. Many poor debtors seek bankruptcy protection simply to rid themselves of the nuisance of debt collection.
While there is no minimum amount of debt required to file a Chapter 13 bankruptcy, the bankruptcy laws set a ceiling on the amount of secured and unsecured debt a person can have in a Chapter 13 case. These limits as of April 1, 2010 are $1,081,400 for secured debt and $360,475 for unsecured debt. The Chapter 13 debt limits adjust every three years. Cases that exceed these limits are ineligible for Chapter 13 bankruptcy, but may qualify under Chapters 7 or 11. There is currently some confusion in our courts as to how these debt limits apply in a joint husband and wife Chapter 13 case. Some courts will separately consider debt that is individual and not joint, effectively increasing the Chapter 13 limits.
An experienced bankruptcy attorney can evaluate your case and discuss any issues surrounding your case. Whatever the amount of your debt, if you are unable to pay, the federal bankruptcy laws can offer you substantial relief. Speak with an experienced bankruptcy attorney and discover how the federal bankruptcy laws can help you.
In cases where the amount of dischargeable debt is objectively small, both the bankruptcy attorney and the client should take care to consider all of the consequences of filing. First, bankruptcy is not cheap. There is a court filing fee, a credit counseling fee, a personal financial management course fee, and, of course, your attorney’s fees. In some extreme cases some or all of these fees may be waived. Second, a bankruptcy filing can significantly impair the debtor’s ability to borrow money and obtain credit, at least for the short term. Finally, non-exempt property may be at risk. For many poor debtors, these consequences have little, if any, affect. Many poor debtors seek bankruptcy protection simply to rid themselves of the nuisance of debt collection.
While there is no minimum amount of debt required to file a Chapter 13 bankruptcy, the bankruptcy laws set a ceiling on the amount of secured and unsecured debt a person can have in a Chapter 13 case. These limits as of April 1, 2010 are $1,081,400 for secured debt and $360,475 for unsecured debt. The Chapter 13 debt limits adjust every three years. Cases that exceed these limits are ineligible for Chapter 13 bankruptcy, but may qualify under Chapters 7 or 11. There is currently some confusion in our courts as to how these debt limits apply in a joint husband and wife Chapter 13 case. Some courts will separately consider debt that is individual and not joint, effectively increasing the Chapter 13 limits.
An experienced bankruptcy attorney can evaluate your case and discuss any issues surrounding your case. Whatever the amount of your debt, if you are unable to pay, the federal bankruptcy laws can offer you substantial relief. Speak with an experienced bankruptcy attorney and discover how the federal bankruptcy laws can help you.
How Much Debt Do I Need To File Bankruptcy?
There is no qualifying minimum debt limit for an individual bankruptcy. Debtors who otherwise qualify for Chapter 7 bankruptcy can file with any amount of secured or unsecured debt. The purpose of a Chapter 7 bankruptcy is to provide the debtor a fresh start without the burden of overwhelming debt. In some cases this debt may be objectively very small (perhaps only a few thousand dollars), but it be relatively very large to a person on a fixed income from retirement, disability, or otherwise.
In cases where the amount of dischargeable debt is objectively small, both the bankruptcy attorney and the client should take care to consider all of the consequences of filing. First, bankruptcy is not cheap. There is a court filing fee, a credit counseling fee, a personal financial management course fee, and, of course, your attorney’s fees. In some extreme cases some or all of these fees may be waived. Second, a bankruptcy filing can significantly impair the debtor’s ability to borrow money and obtain credit, at least for the short term. Finally, non-exempt property may be at risk. For many poor debtors, these consequences have little, if any, affect. Many poor debtors seek bankruptcy protection simply to rid themselves of the nuisance of debt collection.
While there is no minimum amount of debt required to file a Chapter 13 bankruptcy, the bankruptcy laws set a ceiling on the amount of secured and unsecured debt a person can have in a Chapter 13 case. These limits as of April 1, 2010 are $1,081,400 for secured debt and $360,475 for unsecured debt. The Chapter 13 debt limits adjust every three years. Cases that exceed these limits are ineligible for Chapter 13 bankruptcy, but may qualify under Chapters 7 or 11. There is currently some confusion in our courts as to how these debt limits apply in a joint husband and wife Chapter 13 case. Some courts will separately consider debt that is individual and not joint, effectively increasing the Chapter 13 limits.
An experienced bankruptcy attorney can evaluate your case and discuss any issues surrounding your case. Whatever the amount of your debt, if you are unable to pay, the federal bankruptcy laws can offer you substantial relief. Speak with an experienced bankruptcy attorney and discover how the federal bankruptcy laws can help you.
In cases where the amount of dischargeable debt is objectively small, both the bankruptcy attorney and the client should take care to consider all of the consequences of filing. First, bankruptcy is not cheap. There is a court filing fee, a credit counseling fee, a personal financial management course fee, and, of course, your attorney’s fees. In some extreme cases some or all of these fees may be waived. Second, a bankruptcy filing can significantly impair the debtor’s ability to borrow money and obtain credit, at least for the short term. Finally, non-exempt property may be at risk. For many poor debtors, these consequences have little, if any, affect. Many poor debtors seek bankruptcy protection simply to rid themselves of the nuisance of debt collection.
While there is no minimum amount of debt required to file a Chapter 13 bankruptcy, the bankruptcy laws set a ceiling on the amount of secured and unsecured debt a person can have in a Chapter 13 case. These limits as of April 1, 2010 are $1,081,400 for secured debt and $360,475 for unsecured debt. The Chapter 13 debt limits adjust every three years. Cases that exceed these limits are ineligible for Chapter 13 bankruptcy, but may qualify under Chapters 7 or 11. There is currently some confusion in our courts as to how these debt limits apply in a joint husband and wife Chapter 13 case. Some courts will separately consider debt that is individual and not joint, effectively increasing the Chapter 13 limits.
An experienced bankruptcy attorney can evaluate your case and discuss any issues surrounding your case. Whatever the amount of your debt, if you are unable to pay, the federal bankruptcy laws can offer you substantial relief. Speak with an experienced bankruptcy attorney and discover how the federal bankruptcy laws can help you.
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