Under the U.S. Bankruptcy Code, if a debt is discharged in a bankruptcy case, it does NOT count as taxable income. Bankruptcy-discharged debt is, therefore, much more powerful than merely canceled debt. While canceled debt may create an income tax liability, discharged debt does not. See What is a 1099c and what do I do [...]
March 2010
A second mortgage lien in the wife’s individual Chapter 13 bankruptcy case has been stripped by a Court, even though the mortgage and lien were in the name of the wife and her non-filing husband. Eastern District of Michigan bankruptcy Judge Rhodes wrote the opinion, finding the debts totally unsecured. In each case, it was [...]
Payments on student loans that are guaranteed ultimately by the federal government — the vast majority of student loan debt, in other words — can be garnished from your paycheck. And it can be done without going to court. But bankruptcy can stop the garnishment. Even if you live in a state that prevents garnishment [...]
Dear readers – after almost a week, we’ve finally come to the end of the bankruptcy means test form. We’ve figured out your current monthly income, your current monthly disposable income, your allowances and your deductions. And we’ve established whether you are an “above-median income” debtor or not. So we’ve discovered your “applicable commitment period” [...]
Three years into the mortgage foreclosure crisis, a major lender has finally announced that it will reduce principal on “underwater” mortgages. Sort of. According to The New York Times, BoA won’t actually write down loans to the value of the property (which is more than it would get in a foreclosure). Rather (and here’s where [...]
We’ve been spending the last week or so showing you just how simple it is to complete the means test form. Now, we have just one little box that could lead you to pull your hair out. You need to consider you “projected chapter 13 payment” as well as the “multiplier” which applies to your [...]
