Chapter 13 Bankruptcy

19 May Why I Prefer Chapter 7 Bankruptcy to Chapter 13 Debt Consolidation

Most folks considering bankruptcy will consider two options - Chapter 7 and Chapter 13. Sometimes, you have the option of choosing either type of bankruptcy, whereas in other situations you would only be eligible to file either a Chapter 7 or a Chapter 13. When I meet with a client, I always start with the question of how can I fit this person into Chapter 7. It is not always possible, but, in my experience my Chapter 7 just works better - my clients get their discharge that wipes out debt completely, their cases are over in about 5 months, credit rebuilding can start within a year and the cost of bankruptcy is about 25% of the cost of Chapter 13.
Read More

09 Jan Bankruptcy Rule 3002.1: An Unlikely New Weapon Against Debtors

It has been five years since Congress and the U.S. Supreme Court enacted Bankruptcy Rule 3002.1.  Hailed as a victory for homeowners against greedy mortgage banks, the rule was designed to force banks to certify to the court that the homeowner was current in payments...

Read More

06 Jan Is Your Car Loan Underwater – What Are Your Options?

underwater car loanWould you be surprised to discover that your car is underwater? Not underwater in the sense of being wet, but in a financial sense. You are financially underwater with your loan if the fair market value of your vehicle is substantially less than the debt you owe. According to Edmunds.com, quite a lot of folks are significantly underwater with their loans. In 2016 nearly one-third of all vehicles offered for trade ins at dealerships are worth less than the debt encumbering those vehicles. By comparison, the underwater percentage was less than 14% in 2009.

Why Do Car Loans Get Upside Down and What Does it Mean?

There are several reasons why you may get upside down with your loan. First, the average term of car loans is getting longer - Experian reports that the average loan now lasts between 68 and 72 months. Further, the average loan now amounts to around $30,000. Second, vehicles are what as known as depreciating assets - they lose value every year and with every mile driven. When you do the math, you won’t break even on a $30,000 loan financed over 72 months at a 4% until year 3 or 4 of the loan. As the interest rate goes up, it may be year 5 or even year 6 before your loan balance falls below the vehicle value. If you trade in your underwater vehicle for a replacement (or if you have to replace a damaged or destroyed car) when the loan balance exceeds the fair market value, the replacement lender will reduce the unpaid balance by the wholesale value of the original car and “roll in” the remaining balance into a new loan. You may end up with Mercedes sized payments but a modest Chevrolet in your driveway.
Read More

06 Dec Your Chapter 13 Is Filed, You Still Have Work To Do

debtors duties after filing Chapter 13Much has been written on this site and others about the information you need to gather to help your lawyer prepare your Chapter 13 case. You have also learned about mistakes to avoid during the weeks and months prior to your Chapter 13 filing. Now your attorney has "pressed the button" and your case has been filed. A case number has been issued and the immediate crisis has passed. The repo agent is no longer circling the block, the foreclosure has been called off and the harassing phone calls have stopped. But now is not the time to relax because the Bankruptcy Code sets out numerous steps that you and your lawyer have to take to prepare your case for confirmation (a formal approval by the judge) of your Chapter 13 plan. Here is a checklist of tasks that you must undertake to help your lawyer get your case ready for confirmation:
Read More