For most Americans, there are two applicable chapters in bankruptcy, chapter 7 and chapter 13. The determination of filing either a chapter 7 or chapter 13 is made first, by the consumer's needs and second, by the amount of assets or amount of income. The "new" bankruptcy laws created a complicated "means test".
Aside from the means test calculation, taxes, saving one's home, and keeping assets are the most common reasons to file chapter 13. Chapter 13 allows a consumer to pay tax liabilities over time without penalties and interest. One can also catch up on mortgage payments in a chapter 13. If a consumer has assets he or she wants to keep, but can't afford to payoff all the debt, payments can be made to the extent of the value of the assets.
Chapter 13 can be complicated. An attorney should be used to navigate through this bankruptcy.
Chapter 7 is effectively a liquidation. Someone filing under this chapter figuratively comes to the court and says, "here's all my stuff, here are my debts, and here's my income. I don't have any assets to pay my debts and I don't have enough income to pay off what I owe."
In both chapter 13 and chapter 7, a trustee is appointed. The chapter 7 trustee is charged with the responsibility of collecting assets, investigating transfers, if any, and scrutinizing financial records to determine the truthfulness of the bankruptcy papers.
Although it is preferable to proceed under chapter 7 because of the quickness of completing the case, it can also be more stressful for the consumer if any potential issues exist.
When determining assets, one filing bankruptcy must list all the assets. Each state has laws that permit "exemptions". That is, the laws allow consumers to protect assets from the reach of creditors or the trustee. In Florida, where I practice law, consumers have unlimited protection of their home and retirement plans. Unfortunately, the protection of personal property is limited to $1,000 (if own a home) or $4,000 (if don't own a home) and $1,000 in equity in a car. Reach out to the office today at 561-478-2500 for the legal guidance and representation you need.
When you are faced with a collection action you will find that creditors will resort to all available means to try to get your money. Although the Fair Debt Collection Practices Act restricts the way they try to collect the debt, creditors still sometimes violate the law to try to get you to pay. When they call, get the name of the person calling, what company they are calling from, the address of the business, and the phone number. Do not be intimidated by them.
Together we can find the best solution that suits your needs. Remember, the creditor wants only one thing, money. But, they cannot get blood from a turnip. So, a compromise can usually be made. Reach out to the office today at 561-478-2500 for the legal guidance and representation you need.
The current economic climate has made it ripe for loan modifications. President Obama put into action the Homeowner Affordability and Stability Plan which under certain standards helps the homeowner keep his home.
Don't be discouraged by your situation. Set up a meeting and we can discuss the circumstances. There is no cost to you.
Together we will determine whether this is the best option for you. Reach out to the office today at 561-478-2500 for the legal guidance and representation you need.
When faced with foreclosure, there are many alternatives. Can you reinstate the loan? Can the loan be modified? Do you just need more time to get everything in order to move from the home?
We will discuss the best alternative for you and come up with a solution to meet your needs.
At Brian K. McMahon, P.A. there is never any pressure to choose one course of action over another. Reach out to the office today at 561-478-2500 for the legal guidance and representation you need.