Some types of debts that are commonly removed are credit card debts, medical debts, personal loans,payday loans, auto loans and mortgage loans.

Some types of debts that cannot be discharged are student loans, child support obligations most type of tax debt, divorce decrees, parking tickets and most debt owed to any level of government (city, state or federal).

When do I have to give up my home or car? The basis for losing an item of personal property depends on the value of the property and also whether or not there is an exemption protecting that property.

It is the value of something that determines if it is an asset that the Trustee needs to take and liquidate (sell to give money to your creditors).

If a person’s house has a mortgage on it, or a car has a loan on it, there is often no value for that property. This is because if the Trustee was to sell the house or car, they must pay the lender first and nothing is left over for the creditors. This is why most people keep their homes or cars even though they file Chapter 7. Even if the house or car is worth more than what is owed, there are some exemptions to protect those ($15,000 per filer for a filer’s home, and $2,400 per filer for a vehicle). The vast majority of people that file Chapter 7 Bankruptcy keep their homes and cars if they want to.

On the other hand, if someone wants to get rid of a home or car, they are generally free to do so.

Your attorney will always inform you how your property would be affected by filing Chapter 7 Bankruptcy.

There are three basic items to consider for filing bankruptcy.

1. Previous Bankruptcies. If you have filed a bankruptcy in the last 2-8 years, depending on the Chapter and the final disposition of the case, you may not be eligible to file.

2. Income vs. Expenses. If you have money left over at the end of every month’s bills (more than a little) you may not qualify for Chapter 7 Bankruptcy.

3. The Means Test. The Means test is basically a formula that takes into consideration where you live, what you own, your household size, your household income and makes its own determination of your eligibility.

Unfortunately, it’s not easy for people to determine eligibility on their own. Please contact our law firm to speak with an experienced bankruptcy attorney for a free consultation that can answer these or other questions.

There is one hearing, really a “meeting,” that a filer must attend. This, in most cases, is the only meeting a filer will attend and usually doesn’t last longer than 10 minutes. This is where you will meet the Trustee and he/she will ask you questions similar to what your attorney will ask you at your first consultation. Your attorney will also be with you at your meeting.

The automatic stay is one of the best parts about bankruptcy. An “order for relief” (or protection of your property) is known as the automatic stay. This order immediately stops most creditors from collecting what is owed. This often stops law suits, wage assignments, wage garnishments, car repossession and prevent other service disruptions.

Consult with a bankruptcy attorney to see how the automatic stay may protect you.

The reason a Chapter 13 is often attractive is because unlike a Chapter 7, it gives you the opportunity to become current on a debt that otherwise the collateral would be lost because of how far behind on payments the filer may be.

The most common example of this would be a filer who wants to stop foreclosure and save their home.

A Chapter 13 creates a plan of repayment where a filer can pay back the amounts they are behind (the “arrears” or “arrearage”) and at the end of the Chapter 13 plan be completely current. This can pull a home out of foreclosure even up to a few minutes before the time of a foreclosure auction/sale. The same is true for automobiles.

In the same scenario for a Chapter 7, you would be unlikely to keep your home without some further agreement reached outside of bankruptcy.

The amount to be repaid is largely determined by the amount of debt and the type of a debt. Your attorney would inform of you of what the payments would likely be before you filed for Chapter 13 Bankruptcy.

A Chapter 13 plan typically runs between 36 to 60 months. There can be exceptions where it can be shorter but a plan can never be set for longer than 60 months.

There is one hearing, really a “meeting,” that a filer must attend. This, in most cases, is the only meeting a filer will attend and usually doesn’t last longer than 10 minutes. This is where you will meet the Trustee and he/she will ask you questions similar to what your attorney will ask you at your first consultation. Your attorney will also be with you at your meeting.

There are three basic items to consider for filing bankruptcy.

A. Previous Bankruptcies. If you have filed a bankruptcy in the last 2-8 years, depending on the Chapter and the final disposition of the case, you may not be eligible to file.

B. Income vs. Expenses. Unlike Chapter 7, the amount of money left over at the end of the month will go towards determining how much your monthly play payment should be.

C. The Means Test. The Means test is basically a formula that takes into consideration where you live, what you own, your household size, your household income and makes its own determination of your eligibility. In a Chapter 13, it can set a floor on the amount of money unsecured creditors should receive and also can determine the number of months a plan should be paid over.

In a real sense, all of this is really governed by the filer’s ability to pay. Certain arrearages on secured debts, total secured debts or priority debts usually must be paid in full. Sometimes the total amounts can make a Chapter 13 Bankruptcy too expensive on a month to month level and it becomes an unworkable solution.

Lien stripping is one of the best attributes in a Chapter 13 that a Chapter 7 cannot offer. In a scenario where there is a 2 nd mortgage on a home in addition to the first, and if the first mortgage exceeds the value of the home, it may be possible to “strip” the second mortgage. What happens is that the 2 nd mortgage is treated like an unsecured debt (because there is no equity in the home to support it) and at the end of the Chapter 13 plan it is gone like all the other discharged debts.

Cramming down is a term for when certain assets can be paid for through a Chapter 13 for the current value of the asset as opposed to the amount owed. This is possible most often on an automobile that has been purchased over 2 and half years ago. Sometimes it can also be applied to secondary properties other than a filer’s primary residence. It is not simple to know when a cram-down can be applied to a property. Please contact our law firm to speak with an experienced bankruptcy attorney for a free consultation that can answer these or other questions.