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In the last article I touched briefly on whether or not you could continue to make payments on property used as collateral without having to reaffirm the debt with the lender. To understand your options with regard to personal property used as collateral, I will be using the example of a car loan.
The overhaul of the U.S. Bankruptcy laws in 2005 significantly impacted the way secured debt is handled in a bankruptcy proceeding. Those changes were to the great benefit of debtors, our clients. Secured debt is a loan where you have pledged an asset (most commonly a car or a house) as collateral. In the event you do not repay the loan, the creditor has the right to take possession of the property, sell it, and recover what money it can from the sale.
After your bankruptcy papers are filed, the court will send a Notice of the Appointment of a Trustee and Notice of the Section 341(a) Meeting of Creditors. Your next step is to make sure you keep any paycheck stubs, direct deposit stubs, bank statements, etc. We will let you know about any other payments that need to be paid within a month or two after your case is filed. Your actual chapter 13 plan payments generally begin within 30 days after you file your petition. We sign you up for the credit counseling course and you will need to complete this course within a specified period of time.
The Statement of Current Monthly Income is used by judges to determine if your income level raises the question of abuse of the bankruptcy laws. Part of the responsibility of the judge in a bankruptcy case is to ensure that debtors do not abuse the bankruptcy laws and avoid paying debts by filing bankruptcy when they have the means to pay. Prior to 2005, this determination was made at the discretion of judges. After new bankruptcy laws were passed in 2005, judges are no longer able to use their discretion, but instead follow the formulas outlined in the law to determine if there is abuse. The Statement of Current Monthly Income provides this information to the judge.
You’ve filed your chapter 13 bankruptcy paperwork and submitted your schedules and payment plan. The meeting of creditors is completed and you’ve answered the trustee’s questions. The next step in the process is your confirmation hearing. In some courts, the confirmation hearing will happen on the same day as the meeting of creditors. In […]
Wherever you decide to file for bankruptcy, that location is presumed to be the right one until it is successfully challenged by a creditor or the trustee in your case, whose job it is to administer your estate. However, once challenged, there is a rule for where to file. You can file where you were […]
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 […]
It is the trustee’s job to administer your bankruptcy case. He’s the one who will try to figure out how much property you own, what can be sold, and how much to pay creditors. He challenges anything in the case he does not agree with, and he holds the all-important creditor meeting. So what’s in […]
It depends. In some cases, immediate filing may be in your best interest to avoid losing property. In many other cases, you may be better off waiting to file so that you ensure that you are able to come out of your bankruptcy with a fresh start, or to ensure you do not lose a […]
Unsecured creditors in a chapter 13 are entitled to receive 100% of your monthly disposable income. Unsecured creditors are owed debts such as credit card debt, medical debt and other debt that does not include any property pledged as collateral. Your monthly disposable income is determined by a formula provided by the bankruptcy law known […]