Most debts are dischargeable in bankruptcy. However, there are a few debts that are not:
1. Debts arising from fraudulent conduct 2. Government-backed student loans (unless severe hardship can be shown)
3. Debts stemming from death or personal injuries related to your operation of a motor vehicle while intoxicated 4. Certain taxes and fines 5. Some debts not listed on your bankruptcy 6. Domestic support obligations (alimony, child support, etc.)
The Fair Credit Reporting Act (FCRA) was originally enacted in 1970, and was amended in 2003. It applied to consumer reporting agencies, which are companies that collect and distribute information about people’s credit. Under the FCRA, consumer reporting agencies must provide you, upon your request, with a free copy of your credit report once per year. This is so you can verify the information contained in your credit report and dispute anything that disagree with. You can request your free report via phone, mail, or www.annualcreditreport.com. The FCRA also dictates how long negative information can be retained on your credit report. This is usually seven years, though bankruptcies stay for ten years.
If you feel that you have an issue with your credit report, contact a Jacksonville Consumer Law Attorney today at 904-685-1200.
Yes, legal fees can be included in your Chapter 13 Plan. Legal fees owed to the attorney filing your case are oftentimes put into the Chapter 13 Plan. This can help you afford to file sooner in most cases, which may be in your financial best interest. Here at Law Office of David M. Goldman, we can work with your budget to help you afford to file your bankruptcy.
Legal fees from past cases can sometimes be discharged in your bankruptcy. Legal fees that are not dischargeable can be those that you are dictated to pay in an Order signed by a judge, and sometimes legal fees stemming from family law cases. To see if your legal debt can be discharged in a bankruptcy, contact a St. Augustine Bankruptcy Attorney today to discuss your specific case.
There are three classifications for debts in a bankruptcy. They are: Priority debts, Secured debts and Unsecured debts.
Priority debts are generally not dischargeable, they include debts like those to the IRS, domestic support agreements and penalties for death or personal injuries arising from DUI offenses (If you do have a DUI scenario that sounds like this, please call our office to speak with a Jacksonville DUI Attorney as it is easier to defend the DUI liability than trying to discharge it in bankruptcy). You will continue to owe Priority debts after a Chapter 7 as well as after a Chapter 13 until or unless they are paid off.
Secured debts are monies owed pursuant to a purchase contract, such as a car with a purchase money security or a house with a mortgage. A debtor has three choices when it comes to secured debts in a Chapter 7 bankruptcy:
1. Surrender. The debtor can surrender the secured asset to the creditor to satisfy the debt.
2. Reaffirm. The debtor can offer to the creditor a new contract to allow them to keep the property- typically this is done with the same initial terms as the original contract. It is important to remember that this is an offer to reenter the contract, the creditor is not obligated to agree, though they usually do as long as payments are up to date.
3. Redeem. The debtor can pay the creditor the market value of the secured asset and keep the asset. Since market value is often less than the value in the secured instrument, this is an attractive choice, but it is rarely used because the money is owed at that time- while the debtor is in bankruptcy.
Secured debts in a Chapter 13 are treated differently than in a Chapter 7. In a Chapter 13 the debtor can either surrender the asset or continue to pay on it through their bankruptcy plan. Chapter 13 offers the unique ability to “catch up” on arrearages over the life of the plan, so payments on a secured asset in a Chapter 13 need not be up to date and the creditor has little choice but to allow the debtor to make up the money owed over the length of their plan. There is also the possibility of doing a “Cram-Down” as outlined in my earlier article on Cram-Downs.
Unsecured debts are monies owed with no security interest, such as credit cards, payday loans, etc. These are generally eliminated in a Chapter 7 bankruptcy. In a Chapter 13, secured creditors may get very little (though never less than they would get in a Chapter 7), they may also get paid off entirely, it depends on the kind of repayment plan your debt and disposable income requires.
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The Fair Debt Collection Practices Act (FDCPA), as amended in 2006, is a federal law that outlines some practices that are illegal for debt collectors to employ. The purpose of the Act is to eliminate abusive debt collection practice by debt collectors. Here are some highlights of the Act, though this list is not exhaustive:
A debt collectors may not:
1. Use or threat to use violence to harm your physical person, reputation, or property
A short sale is when you sell your property for less than you owe on the mortgage, creating a deficiency amount that you still owe on the loan. If you are planning to file for bankruptcy, a short sale is usually not in your best interest. Here are some reasons why:
1. A short sale will damage your credit. You will be defaulting on a contract, and so the mortgage company will report on your credit that you settled for less than the actual amount owed. This can oftentimes have the same negative effect as a foreclosure. If you are going to file for bankruptcy, then you do not need an additional negative report on your credit.
2. The short sale will not alleviate any liability issues. If you are filing for bankruptcy and surrendering the property, then you probably will not be liable for the deficiency amount anyways. In a bankruptcy, you almost always surrender the property in full satisfaction of the debt, so a short sale does not get you away from any problems that the bankruptcy itself does not handle.
A reaffirmation agreement is an agreement between you and the creditor that holds a secured lien on collateral that you have previously purchased. This reaffirms the debt that you owe the creditor. So if you own a car and you file Chapter 7 bankruptcy, you can either surrender the collateral (give it back to the creditor), redeem the collateral (refinance through another company), or you can reaffirm the collateral by signing a reaffirmation agreement with the creditor and filing it with the court. This reaffirmation agreement basically says that you will be responsible for the debt just as you were before you filed the bankruptcy. If you do not do one of the above options, the creditor can repossess your vehicle.
As for your home, In re: Linderman dictates that you must also do one of the above options for your real property. So if you file a Chapter 7 bankruptcy and want to keep your home, you must sign a reaffirmation agreement with your mortgage company.
If you need help with your bankruptcy or want to know how to file a reaffirmation agreement, contact a Jacksonville Bankruptcy Attorney today.
No, there is not a minimum amount of debt that you must have in order to file a bankruptcy. You can file with any amount owed to any creditor. However, you will want to analyze whether a bankruptcy is in your financial best interest. Meaning that if you have a very low amount of debt with only a few creditors, it may be in your best interest to negotiate with those creditors to try to lower your amount due to them. A Jacksonville Bankruptcy Attorney can possibly negotiate a debt settlement with your creditors for you. If the creditor has already filed a lawsuit against you, the Jacksonville Bankruptcy Attorney can defend the suit on your behalf and try to reach an amicable solution between you and your creditor.
Contact a Jacksonville Bankruptcy Attorney at 904-685-1200 today for all your consumer law needs!
A means test dictates what chapter of bankruptcy you qualify for. This is a very important part of your case, and a Jacksonville Bankruptcy Attorney will make sure that it is done correctly. The attorney will input your income for the prior six months and then take deductions for the things allowed by law. Knowing what deductions can be taken and how to accurately calculate them is extremely important, as this will lower your disposable monthly income amount.
Your disposable monthly income number is one of the most important things in your bankruptcy case. This number dictates whether you can file for a Chapter 7 bankruptcy or if you must file for a Chapter 13 bankruptcy. Also, if you file for Chapter 13 bankruptcy, your disposable monthly income number will dictate how much money you must pay to unsecured creditors in your Chapter 13 Plan.
The means test can be very tricky, you really need to know what you are doing to get an accurate test. If it is not done correctly, the trustee will file an objection in your case. We offer means testing here at Law Office of David M. Goldman. Contact a Jacksonville Bankruptcy Attorney today for your free consultation.
Debtors have three options when it comes to secured assets in a Chapter 7 bankruptcy. The first option may be the most obvious: Surrender. The option of surrender gives the debtor the ability to simply give up their interest in the secured property and pass it back to the creditor.
The next option is to Reaffirm. To Reaffirm a debt, the debtor offers the creditor a contract to allow the debtor to keep the property, often with the same terms as the original agreement. This allows the obligation to “go through” the bankruptcy and often enables debtors to keep their financed cars or homes. However, it is important to note that it is up to both the creditor and debtor to come to this agreement. If for some reason the creditor doesn’t want to reaffirm the debt, no one can make them. For this reason I make sure to advise my clients to be sure they’re up to date on all payments on these secured items going into the bankruptcy to induce the creditor into agreeing. Typically, these agreements do work out.
The final and least used option is Redemption. Redemption is the debtor’s right to purchase the secured property for it’s fair market value at the time of filing. It is important to note that this is not the agreed upon amount in the contract. You may owe $3,800.00 on a car, but if it’s only worth $1,000.00 on the day you file, you can pay the $1,000.00 and satisfy the debt to the creditor. The problem with this option, which is why it’s least used, is that very few people who are bankrupt can come up with the additional money. Still, it is better to have options you have little chance of using than have no options at all. I have also heard of some third-party financing companies who will pay off your Redemption amount if you sign a secured note with them. I have never actually seen this work out for the debtor and it seems counter-intuitive to begin a bankruptcy with a new debt, but as I said before, options are good.
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Jacksonville Bankruptcy Lawyer Blog