Chapter 13 Bankruptcy

1. Chapter13Bankruptcy • TheChapter13 Option • Whatis theright bankruptcy chapterfor you? Thechoice is basedupon the factsin each case. In most instances, Chapter 13 allows for the restructuring of debt that is, for example,securedbyyourhomeorcar,taxdebtorstudentloans.Chapter13casesare driven by the ability of people to make their regular monthly household expenses, mortgage and car payments, but, as well, plan payments that are calculated based upon the amount of mortgage, car or student loan payments in arrears, as well as any taxesowingfromyearsprior.EngagingaCertifiedBankruptcyLawSpecialist means you are getting advice from a recognized expert among peers. • First,determineeligibility tofileforChapter 13relief. • Toallow forproper planning beforean emergency arises,such asa looming foreclosuresale,taxlevy,autorepossession,orwagegarnishment. • Provide the required disclosuresand complete allnecessary paperwork. • Credit counseling and debtor education are required. • File a complete bankruptcy package, leaving no details out. • Attend a meeting of creditors conducted by a chapter 13 trustee. • An exit interview to discuss life after bankruptcy and what to expect. • Disclose,DiscloseandDiscloseSomeMore • Essentialfor abankruptcy filingis thatall “Assets,Liabilities, Incomeand Expenses”are disclosed. So, too, whether there have been any transfers or sales of any real or • personal property over the last 2 to4 years. Assets to be disclosedinclude all real, personaland intangible property, wherever located and whateverinterest you may • have. Liabilities, as we have summed up over the years, mean those debts you owe to “Everybodyandanybodythatyouknow,thinkyouknow,haveanidea,inklingorhave everhad a nightmare youowe money to.” Don’tforget those loans youguarantied or cosignedfor,too.Incomeisjustthat,allsourcesofmoneythatyoureceiveonaregular basisfrom all sourcesand any money youhave periodically oreven one off have received.Just as youdon’t want to leaveanything out tothe IRS, so tooyou don’t want toleave offthe sourcesof income ina bankruptcyfiling. Expensesare by farthe category most people and business often have the least control or even awareness of thetotal amount spent. It isthe line items of expenses thatelude people and that often bring them to the brink of bankruptcy.

2. TheMeansTest TheMeansTestcame intobeingfor bankruptcycasesin 2005withthe passageofthe BankruptcyAbusePreventionConsumerProtectionAct (BAPCPA).Althoughsome wouldsay it isa mean test, asit restricts who mayqualify for chapter7 and, therefore, mustfileachapter13.TheMeansTestisreallyatestofwhetheryourannualized monthly income exceeds the median income in the Metropolitan Statistical Area inwhich you live and whether you must commit to a 3- or 5-year chapter 13 plan. To calculatetheMeans Testwillrequire disclosingthe sourcesandamount ofall income, secured debt payments, the number and members of the household, tax obligations, life and health insurance payments, ongoing charitable contributions and a laundry list of other qualified expense. Chapter 13 Trustee Whereas the role of the chapter 7 trustee is to determine whether there are any assets that can be liquidated with the proceeds used to pay creditors. The role of the chapter 13 trustee is to see that the most amount possible is paid through a chapter 13 plan and that the chapter 13 debtor has proven that they have the means and ability to make those plan payments. Chapter 13 trustees do not have has broad of powers as a chapter 7 trustee, but their discretion is respected by the courts. They will not only review what has been filed but they will ask for up to 3 years of tax returns (and if you have a refund due, they will insist it be used toward plan payments). They may ask for 6 months of bank statements to evaluate not only your income and expenses. The Chapter 13 trustee will conduct the meeting of creditors that takes place usually within 30 days from the filing date. Creditors may attend. Few do, unless you have one that is really annoyed with their treatment before the filing. The trustee will rely upon the documents provided and the testimony given, but also what is said to them by creditors through emails or delivery of other documents. Again, the disclosures made at the time of filing and after are the keys to getting through the process. The chapter 13 trustee hasnoauthoritytoliquidateproperty;however,achapter13planwillbeevaluated based upon the liquidation value of nonexempt assets and the amount that could be paid to general unsecured creditors under a chapter 7. Exemptions are taken against equity in property as are made available through state law and through the bankruptcy code.Each hasdifferent impactsfor which experiencedcounsel shouldbe sought to advise. Dischargeable Debts – Generally For the average person, most of the debt that is disclosed should be discharged in a chapter 13 following completion of allplan payments. One should consultwith counsel if

3. there are taxes owing or there are family law court orders or judgments. Some other judgmentsmay notbe dischargeddepending upon theunderlying factsupon whichthe judgmentwasentered.Again,itis factdrivenpercase.Taxesover acertainnumberof years may be dischargeable and will be treated as general unsecured claims in a chapter13plan;however,intheeventofoutstandingtaxesa“dischargeabilityanalysis” is recommended to determine when or if certain taxes can be discharged. Filing even a day too soon can jeopardize the discharge of taxes. Omitting debts from disclosure couldleadtothosedebtsnotbeingdischarged.Aswestatedearlier,disclose,disclose and disclose some more. FilingAgain–TimingisEverything So, you need to file a bankruptcy again. Generally, 8 years must pass between the date of the earlier filing and the next filing of a chapter 7. A chapter 13 may follow a chapter 7 soonerintime;however,thistactic,commonlyreferredtoasachapter20(chapter7 pluschapter13)isnotforthefaintofheartortheinexperiencedpractitioner.Visite here: https://www.esbinlaw.com/areas-of-practice/chapter-13-bankruptcy/