Chapter 13

Published on: May 29, 2015

Should I file bankruptcy before I get married?

Deciding when the best time to file for bankruptcy can be a very difficult issue for couples. Especially for couples who are planning to be married. While married couples can still file for bankruptcy jointly and/or separately, being married can make it more difficult to qualify for the bankruptcy chapter you wish to file.

Filing a joint bankruptcy is normally a more convenient process as it allows a couple to wipe out their debts together in a single bankruptcy. This means the couple will not have to attend separate hearings. A joint filing will save the couple money on court costs, as the filing fees are the same for an individual or joint bankruptcy. And attorneys will also charge less for a joint bankruptcy filing than if the attorney was filing two separate bankruptcy petitions.

However, filing a joint bankruptcy may not always be in the best interests of the couple depending on the couple’s income, assets, and debts. Once a couple gets married, they may have a more difficult time qualifying for a Chapter 7 Bankruptcy.

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Published on: May 13, 2015

Chapter 13 – Falling behind on your Monthly Plan Payments

By Kendal Schoepfer

Filing a Chapter 13 Bankruptcy is a very difficult decision to make. The main reason deciding to move forward with a Chapter 13 Bankruptcy can be so difficult is because it can bring with it many limitations that can be hard to swallow.

Working with your attorney, and ultimately your Court appointed Chapter 13 Trustee, you will be put into a Chapter 13 Plan and required to make monthly payments to your Trustee for three (3) to five (5) years. At first this doesn’t sound too bad since you will just make monthly payments for the next three (3) to five (5) years as you would when you finance a new vehicle.

Then you find out more.

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Published on: April 30, 2015

Can I file a Chapter 7 Bankruptcy?

By Kendal Schoepfer

If you are deciding whether you should file a Chapter 7 Bankruptcy or not, the first question that needs to be answered is do you qualify? Whether a person can file a Chapter 7 Bankruptcy almost entirely depends on their current income and household size. As of April 1, 2015, the current household size to income ratio is as follows:

Household Size	Yearly Income
One	$42,718
Two	$52,421
Three	$57,977
Four	$67,539
Five	$75,639
Six	$83,739

To determine if you qualify for a Chapter 7 Bankruptcy use the following example: You are married with two minor children. This would be considered a household size of four. Your income must equal or be less than $67,539 in order to qualify for a Chapter 7 Bankruptcy.

If you make slightly more than the income allowed, you might still be able to qualify if you have certain types of expenses that can be deducted from your income. If you still make more than the income allowed and still need or want to file bankruptcy, you will have to file a Chapter 13 Bankruptcy. A Chapter 13 Bankruptcy is a reorganization of your debts instead of a strict liquidation as is the case with a Chapter 7 Bankruptcy.

However, whether or not a Chapter 7 Bankruptcy is right for you is more than just a question of if you can qualify or not. If you have a lot of assets, you may want to stay clear of a Chapter 7. Any money sitting in a financial account that does not qualify for an exemption will be take from you by the Trustee and used to pay off your debts. This is also true for personal property and real property that is not your homestead. If you have lots of assets and still want to file bankruptcy and be able to keep them, a Chapter 13 Bankruptcy might be a better choice for you.

In other words, there are a lot of considerations to take in to account before deciding whether or not to file a Chapter 7 Bankruptcy. It is best to meet with a bankruptcy attorney who understands all ways you can qualify for a Chapter 7 and which assets may or may not be protected. The attorneys at the Law Office of David M. Goldman, PLLC are here to help you navigate the confusion that comes along with facing bankruptcy. Contact an attorney today by calling (904) 685-1200.

Published on: April 20, 2015

Your Tax Refund and Bankruptcy

By Kendal Schoepfer

As tax season comes to an end, many of my bankruptcy clients want to know whether they can keep their tax refund. The answer is it depends. It depends on when you filed your bankruptcy, how much your refund is, what bankruptcy chapter you filed, why you need your refund, etc.

Chapter 7 Bankruptcy

If you filed a Chapter 7 Bankruptcy, your tax refund is automatically deemed to be property of your bankruptcy estate and must be turned over to your Trustee ASAP. The Trustee will use the refund to pay off your creditors. You may be able to keep all or part of your refund if you are able to exempt it. When you file bankruptcy, you are allowed certain exemptions you can use to keep some of your property. You can use some of your exemptions to keep your tax refund if you choose.

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Published on: April 14, 2015

Bankruptcy for Small Businesses

By Kendal Schoepfer

If your small business is facing financial difficulty and there is no expectation of reorganization, a Chapter 7 Bankruptcy might be your ideal answer. If your small business is a limited liability company (LLC), partnership or corporation AND you do not want to or cannot continue operating your business, a Chapter 7 Bankruptcy can provide a relatively quick and easy way to close the business and liquidate business assets. The chief disadvantage with filing a business Chapter 7 Bankruptcy is that if you are personally liable for any of the business debts, you will also have to file a personal bankruptcy or remain responsible for those debts. Furthermore, there are no exemptions to protect any of the business’ assets and your business does not receive a discharge of its debts. Instead, the Trustee sells all of the business’ assets to pay its creditors and shuts the business down.

If your small business is a sole proprietor, a Chapter 7 Bankruptcy will not only help you wipe out the business debts, it will also wipe out your personal debt. This is because you and your business are considered to be one in the same. You can also use exemptions to protect business assets and continue to operate the business after bankruptcy.

As a sole proprietor, you can also file a Chapter 13 Bankruptcy. A Chapter 13 Bankruptcy allows a sole proprietor to keep all of its assets and pay back all of your debts through a set repayment plan OR pay back a portion of the debt through a repayment plan. However, LLCs, partnerships and corporations cannot file a Chapter 13 Bankruptcy.

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Published on: February 5, 2015

Bankruptcy: what debts are non-dischargeable?

By Kendal Schoepfer

Most debts can be liquidated through a Chapter 7 bankruptcy, or reorganized through a Chapter 13 bankruptcy. However, there are a few debts that can altogether be non-dischargeable.

Some types of debts are always non-dischargeable, unless a debtor can demonstrate extraordinary circumstances to convince a court otherwise. One such debt includes any debt the debtor fails to list on his or her bankruptcy petition; unless the creditor had actual notice or knowledge of the bankruptcy.

Other debts that are generally always non-dischargeable include certain taxes, such as federal tax liens, payroll taxes or fraud penalties. Child support debt and other debts owed to a former spouse that arise from divorce are also non-dischargeable. Student loans, injury caused by DUI, and homeowner association fees are also included in this list.

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Published on: January 29, 2015

Can you sell your house during bankruptcy?

By Kendal Schoepfer

Once a debtor files for bankruptcy, his or her home and other possessions become part of their bankruptcy estate. While creditors cannot automatically foreclose on the property because of bankruptcy protections, the debtor is likewise not allowed to sell a house without first obtaining permission from the court.

During a Chapter 7 bankruptcy, it can be difficult to sell a home. The debtor must first convince the court that the sale will not prejudice ay creditor. A trustee must also obtain the court’s approval to sell a home in order to generate cash for creditors.

However, in a Chapter 13 bankruptcy, a debtor is allowed to sell his or her home as long as the sale does not cause financial harm to the mortgage lender.

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Published on: January 15, 2015

Bankruptcy: What does Preferential Payment mean?

By Kendal Schoepfer

Creditors have hounded you for months. Your bills have been piling up, but you have finally saved enough money to pay off one of your debts in full. You feel some relief because you have finally made a step towards getting out of debt. However, something happens and you are forced to file bankruptcy just three months later. Your bankruptcy trustee may now consider the payment you made a preferential payment, because you paid one debt off in full while giving nothing to your other creditors.

When a debtor declares bankruptcy, he or she is not allowed to show preference to any one creditor and must divide their assets equally among all creditors. This means that if a debtor pays one creditor in full (6 months prior to filing bankruptcy if a normal creditor and 1 year if a family member) the creditor may be forced to give the money back to the bankruptcy trustee.

11 U.S.C. § 547 defines preference as:

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Published on: January 6, 2015

Can a Debtor keep an inheritance during a Chapter 13 bankruptcy?

By Kendal Schoepfer

During bankruptcy, most of a debtor’s property becomes part of the bankruptcy estate. Debtors who file a Chapter 13 bankruptcy are required to repay their creditors through a three to five year repayment plan. If a debtor receives an inheritance during their repayment plan, he or she may be required to amend their plan to account for the inheritance.

In a Chapter 13 bankruptcy, the debtor gets to keep his or her property, but must pay back a certain amount of their debt through a repayment plan. A debtor will usually make monthly payments to the bankruptcy trustee who distributes the money to the debtor’s secured and unsecured creditors. After this three to five year period, the court will discharge the debts.

Any property a debtor acquires during their Chapter 13 bankruptcy most likely will become property of the bankruptcy estate as well. This means an inheritance received during this period can become part of the estate.

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Published on: September 8, 2014

Can Homeowner Association (HOA) fees be discharged through bankruptcy?

By Kendal Schoepfer

Debtors who file for Chapter 7 bankruptcy and owe HOA fees may be able to wipe out these debts. Filing a Chapter 7 bankruptcy is usually a good option if the debtor wishes to give up their home. However, it is important to remember that HOA fees that accrue after filing for bankruptcy cannot be discharged.

A debtor who files a Chapter 7 bankruptcy is required to sign a statement of intention regarding secured debts. This form tells the court and trustee whether the debtor wishes to retain or surrender their property. Debtors who can no longer afford their homes often choose to surrender their property through a Chapter 7 bankruptcy. Through a Chapter 7 bankruptcy, a debtor may be able to discharge all the debts associated with their home, including any homeowner’s fees.

There are a few options for debtors who acquire HOA fees after filing a chapter 7 bankruptcy. One possible solution might include contacting the HOA directly to negotiate a settlement or agreeing to let the association take the property. We recommend contacting an experienced bankruptcy attorney before taking any action.

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