After a bankruptcy case is completed, the trustee will get paid. Trustees administer your bankruptcy case, and will be paid according to a commission based on how many assets are sold to pay creditors. This is an obvious incentive to liquidate assets, but the trustee’s salary will have to be reasonable, also. In this case, a couple filed for Chapter 7 bankruptcy. During their case, the trustee sold their trailer park. The couple argued that the trustee only did this to be paid more, and...
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When you file for bankruptcy, who receives your home depends on a lot of factors. You may get your home if it falls under certain laws, called exemptions. Your creditors may receive it if they have a mortgage on it with what is called priority, meaning that they stand first in line. In this case, Mildred Schoor had sold her home to a real estate agent, who promised that she could live there until she died (she was 85). In exchange, she sold the home...
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When you file for bankruptcy, you have to tell all your creditors that you file. Once you have notified them of the case, they are required to file a proof of claim, which is paperwork establishing to the court that you owe them something. If they fail to file the proof of claim, they may lose any chance to recover what they were owed. In this case, an individual filed for Chapter 13 and proposed to completely get rid of her second mortgage. The second...
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Every bankruptcy case is assigned to a trustee, whose job it is to administer your case. The trustee may challenge almost anything he or she disagrees with, and may be heard on any issue having to do with the bankruptcy. Here, the Bank of America submitted a claim against an individual who had filed bankruptcy. The trustee objected to the bank’s claim, stating that the bank had not given the court the records that were required for a claim. The bank tried to argue that,...
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When you file for bankruptcy, you have to list all your property in paperwork submitted to the bankruptcy court. Then, you may be able to claim that some of your possessions are exempt, or will not be used to pay creditors, under state or federal law. Every state has exemptions for certain automobiles, because it is commonly believed that most people need a car in order to work and get around. Sometimes, whether your vehicle will be exempt will depend on how the exemption is...
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When you complete your Chapter 13 plan, the court will grant you a discharge of much of remaining debt, and you will not longer be required to pay it. The creditors you owed the debt to are forbidden from trying to collect on it, as well. Even if the bankruptcy court made a mistake in discharging certain debts, the creditor can still not collect without the permission of the bankruptcy court. In this case, Francisco Espinosa completed his bankruptcy plan, and received a discharge. Among...
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If a bankruptcy court determines that an attorney who appears before it is not properly qualified or prepared to handle bankruptcy cases, the court may order the attorney to gain more knowledge before he can appear again. In this case, the bankruptcy court ordered an Alaskan attorney to stop filing Chapter 13 plans until he had gained more knowledge in the area, because his plans were poorly drafted. The attorney took this order quite literally, and stopped filing Chapter 13 petitions, but continued filing Chapter...
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When you file any bankruptcy case, one of the biggest advantages is that your creditors are automatically prohibited from attempting to collect on your debts. That means they cannot repossess your car, foreclose on your home, or call you ceaselessly once you file for bankruptcy. In this case, Jason Henry bought a car with a loan from the dealership. He then filed for Chapter 13 bankruptcy. The day after he filed, the lender that he owed money to for his new car called him and...
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In Chapter 13 bankruptcy cases, there is a general requirement that you pay what you owe to as many creditors as you can for 3 to 5 years. At the end of the plan, you have the opportunity to wipe clean all remaining debts that are “unsecured”, such as credit card debt. Because this only applies to unsecured debt, many people try to pay as much secured debt as they can during the course of their plan, because it will need to be paid anyway....
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If you file for Chapter 7 bankruptcy, you need to pass a “means test” in order for your case not to be converted to Chapter 13. The idea behind the test is that many debtors used to abuse the bankruptcy system by filing for Chapter 7 bankruptcy and wiping clean their debts when they could afford to pay more to creditors in the course of a Chapter 13 plan. The test consists of you providing information about how much money to earn and how much...
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