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Underwater mortgages (house is worth less than the amount owed) are hovering around 25% of all homeowners; yet individuals, and debtor advocates, are perplexed by the rules surrounding inferior mortgages on primary residence in chapter 13 bankruptcy. Chapter 13 bankruptcy allows a debtor to remove the 2nd mortgage (or 3rd, or 4th mortgage) so long as the [...]
Continue Reading →As the admonition states at the ancient Oracle of Delphi, “know thy self,” the same idea rings true as you enter the halls of the Bankruptcy system, “know thy budget.”
The most important aspect of an individuals’ bankruptcy is their budget. Your budget determines if you qualify for Chapter 7 Bankruptcy; your budget determines how [...]
Continue Reading →As I prepare for the Thrift Spender Experiment, I recently went through the exercise to determine the true cost of operating and keeping my car. I, and I think most people, never really think about vehicle operating costs on a monthly basis, beyond fuel, because many of the related expenses are periodic (e.g. [...]
Continue Reading →Question
I am planning on filing chapter 13 bankruptcy and have a couple questions regarding what expenses I can claim.
1. I have usually contributed 6% of my pre tax income in a 401K. Can I include that contribution in my expenses thereby reducing my disposable income by approx 500 a month. Note, that 401K [...]
Continue Reading →The most important aspect of a person’s bankruptcy, or for that matter getting out of debt, is the budget. The budget often decides if you file a chapter 7 or chapter 13; if you need to file chapter 13, the budget decides how much you will pay into a chapter 13. The challenge is that [...]
Continue Reading →Question:
In a chapter 13 are you allowed enough money so that you can have an emergency fund?
Answer:
In a chapter 13 payment plan, the bankruptcy code, generally speaking, requires the client to devote “all” of her projected, disposable, monthly income to the payment plan (Section 1325(b)(1)(B)). The real art [...]
Continue Reading →Question:
My dear husband has cancer and has received treatment over the summer. The main part of his treatment has ended but he will have ongoing medical expenses for doctor visits, blood tests, scans and hormone therapy. We have credit card debt, first and second mortgage on an old house that we can’t sell and [...]
Continue Reading →We are not immune to the irony that potential clients are going bankrupt yet they need to come up with money to pay their attorney. Let me address your first question; no, you cannot pay your attorney by credit card. If any bankruptcy attorney offers to accept a credit card for partial payment of fees, [...]
Continue Reading →YES. 401K loan repayments are not part of disposable income for purposes of Chapter 13 Repayment and therefore an allowed expense. Bankruptcy Code Section 1322(f) states that a chapter 13 plan may not materially alter the terms of a loan described in 362(b)(19). To summarize, 362(b)(19) references nearly any type of loan from any type [...]
Continue Reading →I view my role as a Debt Solution Attorney as not only to implement the client’s debt solution (bankruptcy, debt settlement, IRS resolution, etc), but also as a financial counselor to help the client succeed after bankruptcy.
The U.S. Department of Agriculture puts out [...]
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