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How Bankruptcy Can Help You Pay The Value Of Your Car vs. The Balance

Not many things today are made to last, and the minute you get the most current smartphone it seems like a new one is on the market. With so many advances in technology, you would think that the value of things would be on the rise. But, just the opposite seems to happen, with PC’s and other goods losing value the minute you get home from the store. You may have bought a computer a year ago and paid a premium, and that computer is now obsolete but you cannot even sell it on Facebook for a decent amount, meaning you cannot afford to upgrade. The same is true of vehicles, in fact cars are well-known for their instant drop in value the minute you drive off the lot. So, if you are not able to pay what you owe and you can’t sell your car to pay off your loan because your case is worth less than you owe, what can you do?

A Chapter 13 bankruptcy might be the answer to your car value problems, because in a Chapter 13 you are allowed to pay the value instead of the balance. This is how it works:

● You propose a repayment for the value, rather than the balance.
● You are allowed to reduce the interest rate as well as the balance.
● The combination of paying less than the balance, at a lower rate, means your payment is less.

When you are able to pay less than what is owed, you save money and you might even pay off your car note faster. The payment of less than what is owed for your car in a Chapter 13 is referred to as a cram down, and it is used all the time by people who prefer to pay an item’s worth and get out from under an upside down car loan. This cram down feather is only available in a Chapter 13, and in a Chapter 7 bankruptcy you would have to repay the balance if your intention is to keep your car. Chapter 13 has many other benefits, and you can take advantage of them if the circumstances warrant.

For more information about bankruptcy, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that help get you back on your feet.

Is There Such A Thing As “Debtors Prison”?

It is a scary thought to have to spend any amount of time in jail, but if you are charged with a crime it is a real possibility that you may see the inside of a jail cell. Periods of incarceration are generally saved for criminal cases, but there is a lot of talk about “debtors prisons” when people are not able to pay their debts. This may have been the case in medieval England, but you would be hard pressed to find a Judge today, in this country, that will order a person to serve time for not being able to pay their bills. That said, there are some instances where a civil case, even one for debt collection, can result in a jail term. The most common example is the case where you are sued for a debt and are ordered to appear in Court concerning the debt or your assets, but fail to appear. In that instance the Judge may have the authority to issue a bench warrant for your arrest, but that is done more as a contempt matter for not showing up to Court and not for failing to pay debts. If you want to avoid this possibility, you can make sure to appear in Court when ordered to do so, or you can find another way to deal with your debts.

One good way to deal with debt is to file for bankruptcy. When you do, you get these benefits:

● Court cases for collections have to stop, so you can rest easy in the knowledge that you will not be ordered to appear and perhaps forget to show up, which might result in the type of contempt that includes a bench warrant.
● Depending on the type of bankruptcy case you file, you will be able to eliminate all of your unsecured debt. This frees up your money to put towards other needs, and gives you a little bit of breathing room.
● When you owe less, you can save more and this gives you the chance to start a savings account so when emergencies come up down the road you are better prepared to pay for the expense.

We understand how difficult it can be to juggle work, bills, and family; especially if you are stressed about not making enough money to make ends meet. When you are overwhelmed it is easy to ignore your financial problems, or take your chances by not answering a lawsuit or showing up to Court. But these actions only make things worse, and you are better off tackling your finances head on. Bankruptcy is a good way to get back on track with your money, and keep you from having to come up with creative ways each month to get by. If you have more debt than you have paycheck, call us for help.

For answers to your questions about debt and bankruptcy, and what it means to have the discharge of your debts objected to, contact us at www.DsouzaLegalGroup.com.

In A Chapter 13, Are All Debts Paid In The Plan?

A Chapter 13 bankruptcy is one where the debtor proposes a plan of repayment of their debts. If the Court approves the plan, the debtor makes a monthly payment to the Chapter 13 Trustee, and the Trustee sends payments to the lenders. The debtor does not have to keep track of whether a certain creditor was paid that month or not, the debtor just has to pay the Trustee the amount needed to cover all of the debts included in the Plan. But there is the possibility that not all debts will be paid by the Trustee. The best example of a type of debt the Trustee may not pay is your home mortgage. Many debtors want to continue to pay this debt on their own, outside of their plan payment, so the mortgage company will continue to escrow taxes and insurance and there is no question about whether you have paid enough to cover those expenses (which tend to change from year to year).

While it can be nice to pay some things outside of the plan, it is much easier to just make one payment per month to the Trustee and let the Trustee’s office handle disbursement. And, make no mistake; you will still have plenty of things that require you to pay outside of your plan payment, such as:

● Auto insurance
● Cell phone expenses
● Utilities
● Homeowner’s association dues
● Gym memberships

And of course all of your daily living expenses are still your responsibility, outside of your Chapter 13 Plan. You will still need to pay for any cable television services, make sure you have enough room in your budget for gas and groceries, and funds available to pay for emergencies that might arise. The beauty of bankruptcy is that you are reducing the amount of your debt, and thus the amount of monthly expenses. This is true even in a Chapter 13 where you are paying back part of your unsecured debt. When you have less debt, you have money at your disposal to pay for everyday necessities, so the fact you have to do this outside of a Chapter 13 plan is not a big deal. If you have concerns that you are not able to provide for basics and still make your Chapter 13 plan payment, ask your attorney what can be done to alleviate some of the financial pressure you are feeling. It might be possible to modify your plan, so the plan payment is more manageable. Or, there may be another solution that is just right for your bankruptcy case. Call today to find out more.

For more information about bankruptcy, contact us at www.DsouzaLegalGroup.com. We will explain how the process works and make sure you are comfortable before proceeding.

Three Key Components To A Chapter 13 Plan

There are two main types of consumer bankruptcy cases, a Chapter 7 and a Chapter 13. A Chapter 7 is the more preferred chapter to file, because it is faster and allows you to eliminate all of your unsecured debt. And let’s face it, unsecured debt like high rate credit cards, is the reason most people need to file bankruptcy. When credit card balances spiral out of control, it is not long before you are simply spinning your wheels and making no real headway with getting the debt paid in full. The other type of consumer bankruptcy is a Chapter 13. A Chapter 13 can last up to 5 years, and during that time you will be required to pay back a portion of your unsecured debt.

The biggest way a Chapter 13 bankruptcy is different from a Chapter 7 is not only that it takes longer, but that you have to file a plan of repayment for your debts. The three key components to a Chapter 13 Plan include:

● A provision for how you propose to repay your mortgage debt, and how you will get caught up on the past due payments. You will need to know how much you are in arrears, and put that amount in the plan with a proposed monthly payment amount to pay off the back due balance. You will also propose an amount for your regular monthly payment, and then pay both of these sums to the Trustee every month so he or she can distribute the payments to your mortgage holder.
● A provision for how you intend to repay your auto loan and for this provision you are allowed to propose to pay only what the car is worth rather than what is owed. It is common knowledge that cars depreciate rapidly, and once you drive off the lot you are in a vehicle that is worth less than what you owe. Chapter 13 gives you the chance to pay what the car is worth instead of what is owed on the note, and this gives you the chance to save a lot of money.
● A provision for what percent of your unsecured debt will be repaid. This is the purpose of a Chapter 13, at least in the eyes of Congress. In 2005 the Bankruptcy Code was drastically overhauled, and one of the main reasons was to ensure unsecured creditors would not lose out on their entire debt when cases got filed. So, if you are in a Chapter 13, you are having to repay at least part of your unsecured debt and your Chapter 13 Plan will provide what percentage of that debt is going to be repaid; even if it just 1 or 2%.

Once you have proposed a Chapter 13 Plan, your creditors will be given time to object to how you are proposing to repay their debt. Once all of those objections are resolved, the Court will confirm the Plan. You will be required to make a monthly plan payment to the Chapter 13 Trustee, and the Trustee will send payments to your creditors. In this way a Chapter 13 is sort of like a debt consolidation, because you are making one payment per month to cover all of your debts.

For help with bankruptcy, contact us at www.DsouzaLegalGroup.com. We will help by looking at your case and letting you know your options. We work with you to come up with solutions that make sense and fit the facts of your case.

Can I File Bankruptcy If I Haven’t Filed Taxes?

Filing taxes is just about one of the least enjoyable parts of every new year. From the minute you start getting your W2’s in the mail, to the moment you put together all of your documents so tax preparation can begin, the thought of having to fork over a chunk of your money to Uncle Sam hangs out in the back of your mind. And, if you are low on funds, the idea that you have worked all year and paid into the system only to have to pay more now can cause quite a bit of frustration and anxiety. So, it should come as no surprise that filing taxes is one of the most common things that gets put on the back burner. But failing to file taxes comes with its own set of headaches; usually in the form of fines, penalties, and late fees. If you owe taxes, and also have other significant debt, you may be considering filing for bankruptcy. You might also be wondering if you will even be allowed to file a bankruptcy case if you have not yet filed your taxes.

It is a good question, to want to know if you can file bankruptcy without first filing taxes. Here is how it works:

● When a bankruptcy case is filed, the Trustee will ask to see copies of the past few years of your tax returns. If you have not filed taxes, you will not have these documents to provide to the Trustee, and this can create delays in your case.
● You will probably be given a timeframe within your bankruptcy to file your taxes, and the Trustee will likely ask that you simply prepare the returns and give them to the attorney for the IRS or local state taxing authorities for filing. This will expedite the filing of your returns, and allow the bankruptcy court to learn of any tax liability faster.

If you owe taxes, the sooner you take care of preparing the returns and getting them to the right attorney, the faster your bankruptcy case can come to a resolution. You may or may not be able to discharge the tax debt, but until the returns are prepared you will not be able to try and resolve that issue. If you are due a refund, it is possible the Trustee will claim that refund within your bankruptcy case, and distribute it to your creditors. In either instance you will need to get your returns prepared, so the amount due or any refund owed can be handled accordingly in your bankruptcy. For more information about taxes and bankruptcy, call our office to speak with one of our knowledgeable legal professionals today.

For more information about bankruptcy and taxes, contact us at www.DsouzaLegalGroup.com.

Three Long Term Benefits To Bankruptcy

Bankruptcy is a valuable tool that helps many distressed borrowers learn to deal with burdensome debt. When you file for the protection bankruptcy offers, you get immediate relief because the law prohibits collectors from contacting you the instant you file, so you can stop worrying about how you are going to make all of your monthly payments on a limited budget. These are benefits that begin working for you right away, but there are also long term benefits to filing for bankruptcy.

Three of the most common long term benefits to bankruptcy are:

● Your debt is either eliminated or reduced, which means that long after your case is over you don’t have to try and figure out how to continue paying more debt than you can manage.
● Without debt that will likely never be paid off, you can start fresh with a new budget and a fresh outlook on how to manage your finances.
● The financial counseling that you have to go through as a part of your case will give you ideas on how to stay out of financial distress in the future. This lets you start and maintain an emergency fund or savings account, so you are prepared when life hits you with an unexpected expense.

Some people have a hard time making the decision to file for bankruptcy, but when you take into consideration what you have to gain, the choice should become clear. Bankruptcy allows the “honest, but unfortunate debtor” to start over and find solid financial footing. If you have ever wondered about whether bankruptcy is right for you, call us to talk thigs over. We will explain how the process works, tell you what you can expect during your case, and help you see what the picture looks like once your case is finished. When you have all of the information needed to make an informed decision, it becomes easier to plan for your future. And that is what bankruptcy can do for you; it can allow you to get out from overwhelming debt now, so you can stay afloat tomorrow.

For more information about bankruptcy, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.

Two Short Terms Benefits To Bankruptcy

Bankruptcy has helped thousands of people get out from overwhelming debt, and make a fresh financial start. The effects are both long and short term, and can really help you get a handle on your budget. If you owe more than you make and are struggling to keep up with everyday expenses, bankruptcy is the answer for you. When you file a bankruptcy case, you are able to eliminate or significantly reduce most of your debt and focus on making payments for necessities. This type of financial freedom can give you the ability to make a budget and stick to it, and will also relieve a lot of the anxiety you feel at not being able to pay all of your bills.

Two of the benefits you will feel right away, or a short term benefit, when you file bankruptcy include:

• Your creditors will not be able to continue calling you, and will also not be allowed to keep pending any collection or foreclosure lawsuit against you. This benefit is automatic, and in place the minute your case is filed. This gives you a chance to catch your breath, and take a moment to take stock of your bank balance so your everyday needs can be met.
• You are no longer required to pay monthly bills for debts that are being discharged, and this can give you an immediate infusion of cash that is much needed.

Think about how much extra money you might have every month if you did not have to make payments on high interest rate credit cards, or only had to pay what your car is worth rather than what is left due on the contract. This is what bankruptcy can do for you pretty much right away after you file, and is a great short term benefit that allows you to adjust your monthly budget from the get-go.

There are, of course, benefits to bankruptcy that extend beyond these two immediate benefits. But, for most people, getting a fast result when money is tight is best. So, if you need help with your bills or have been taking too many collection phone calls lately, call our office for help. We will go over your case and explain your options to you, so you can make a decision that will offer a satisfactory result tomorrow, and for the years to come.

For more information about debt management and what you can to do get out of debt, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.

Will I Still Make Payments On Debts If I File Bankruptcy?

When you decide to file bankruptcy, you are still responsible for making payments on your debts until your case is filed. This is because until the case is filed and the automatic stay is in place, your lenders are allowed to contact you and ask for payment. However, this does not mean that you have to make payments, and if you are not able to do so you are probably safe from collection efforts if they have not yet begun, for a short while. The key here is to get your case on file as quickly as possible, because a lender can initiate a collection lawsuit against you until bankruptcy is filed. But, because legal proceedings take a bit of time, if you file soon you can probably avoid a judgment being taken against you. This is important because once a judgment is entered, most lenders move quickly to enforce the judgment.

Enforcement of a judgment can be by wage garnishment, repossession of personal property, or sale of your home in a foreclosure case. But, the instant bankruptcy is filed all of those actions have to come to a stop. The automatic stay will be in place right away when you file a bankruptcy case and here are some of the things that your creditors cannot do once the stay is in place:

• Initiate or maintain an action to collect a debt, including leaving wage or bank garnishments in place. Once your bankruptcy case is filed, if there is a pending garnishment, it must be immediately withdrawn.
• Initiate or maintain an action to repossess personal property. So, if you are in danger of having the repo guy pick up your car, once you file bankruptcy, those repo efforts have to stop.
• Initiate or maintain an action to foreclose on your home. If you are in foreclosure when you file bankruptcy, the foreclosure has to stop and this can save your family from having to move out of your family house.

So while you do not have to keep making payments if you are contemplating filing bankruptcy, you do run the risk of having an action initiated or maintained against you up until the point you either make the required payment or file for the protection of bankruptcy. We understand the timing can be hard to get just right, especially when finances are in turmoil, so work hard to keep your lenders off of your back while you act fast to get a case filed. If you are having trouble making ends meet, call us to find out what you can do to stop the calls and lawsuits.

For more information about bankruptcy, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.

Can I Reopen A Closed Bankruptcy Case?

The point of filing bankruptcy is to receive a bankruptcy discharge. The discharge is what makes your debts no longer due and payable, and shortly after your case is discharged the Court Clerk’s office will also make an entry on the docket that your case is closed. The closing of a case is an administrative function, but until that happens the Trustee assigned to your case does retain an interest in the property of the estate (unless that interest has been abandoned, either by order or by operation of law). This might sound a bit confusing, but that is mostly because it is a lot of legal terminology. The bottom line is that the closing of a case is the final act that takes place, and this is the time you can consider that your case has come to a final conclusion.

That said, there might be situations that arise that put you in need of further relief from the Court. For example, if you accidently left off a creditor from your case, or you wanted to reaffirm a debt but did not have the chance to do so during your case, you might want the Court to allow you to do those things after the case is closed. So, the question becomes “can I reopen a closed bankruptcy case?”. The answer is yes, but only for certain things, such as:

• The administration of some of your debts that were not handled in the case.
• To avoid a lien that was not avoided during your case.
• To correct a mistake on any of the bankruptcy documents you filed.
• To dispose of a dispute regarding the order of discharge.

In order to have a case reopened you have to file a motion asking the Court to allow the matter to be reopened. And, the debtor is not the only entity that can make this request. It is possible for a lender or even the trustee to ask that a case be reopened. While this is rare, it does happen and if it happens to you, you should immediately talk with your bankruptcy attorney about your next step. If you have a need to reopen your case, or if someone else is asking that your bankruptcy be reopened, call us for help.

For more information about how to manage debt, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.

How Much Debt Do I Need To File For Bankruptcy?

If you have more debt than you can handle, you might be wondering if bankruptcy is the answer and what the requirements are to file a case. There is a lot of information, and misinformation, out there about how bankruptcy works. For instance, you may have heard that you can keep your things without having to pay, but that is not true. Even if bankruptcy, if you want to hang on to your car or house, you have to come to an agreement with the creditor about the payments. If you do not make the payments, you can lose your house or your car. Another good example of some of the misperceptions about bankruptcy is that you have to have a certain amount of debt in order to be eligible to file a case. This might stem from the changes Congress made to the bankruptcy laws in 2005, and while there are inquiries made into your income, you do not have to have a certain amount of debt to be able to file a case.

The thought that a minimum amount of debt must be accumulated before you are allowed to file bankruptcy might come from information about the means test. The means test was put in place in 2005 and depending on the mathematical outcome of this test you might have to file a Chapter 13 instead of a Chapter 7, but you are not prohibited from filing a case at all. It works like this:

• Your total secured debt is looked at in comparison to your income.
• There is a “look back” time frame, and it is this timeframe for which your income is calculated. So if you just received a large bonus that is not normally part of your salary, you might want to wait to file a case until the month in which the bonus was paid falls outside the look back period.
• The threshold figures are different for different geographic regions, so it is best to have a trained bankruptcy professional perform the means test calculation.

If the result in your case is that your income is such that you are eligible for a Chapter 13 instead of a Chapter 7, this means you will be in bankruptcy for up to 5 years rather than for approximately 4 to 6 months. It also means you will have to repay at least a part of your unsecured debt, which is usually made up of debt such as medical bills and credit cards. Most people prefer to file a Chapter 7 because these restrictions are not in place, but the amount of debt you have does not mean you cannot file at all; it just means that when taking a look at that figure in conjunction with your income, you may be “forced” to file a Chapter 13 in order to get relief. If you are having trouble paying your bills, either type of bankruptcy case is helpful. Call us today to learn more.

For more information about how to handle overwhelming debt, contact us at www.DsouzaLegalGroup.com. We will help by coming up with solutions that work for you.