Individuals who are faced with the prospect of foreclosure may have legal options to save their homes through Chapter 13 bankruptcy. As with any legal matter, very strict conditions apply, and not everyone may qualify for this option.

When an individual declares bankruptcy, regardless of the chapter, his or her debts are placed in an automatic stay. This means that creditors, including mortgage lenders, cannot seek repayment from the individual, usually for a period of three or four months.

Under Chapter 13 bankruptcy, individuals are allowed to restructure their debts. What this means is that the individual is allowed to work out more manageable repayment plans with their lenders so that they can repay their debts over a period of time.

Home mortgages are included among the debts that individuals are allowed to restructure. However, individuals may only work out plans to repay their past due amounts. Whatever future payments arise will not change.

Because individuals are allowed to restructure their past due debts, individuals who can work out plans to repay their past due mortgage payments and who can stay current on future payments may be allowed to keep their homes.

It is important to note that individuals wishing to save their homes in this way will have to declare bankruptcy before being served with their foreclosure notices. If an individual has already been served with a foreclosure notice, then he or she may not be able to save his or her home through a bankruptcy filings.

Before deciding on declaring bankruptcy, individuals are advised to seek experienced legal help. Declaring bankruptcy may not be the best option for some individuals wishing to save their homes, but may be incredibly valuable for others.

Foreclosure and bankruptcy are both daunting and stressful. If you are facing both, you should discuss your financial options with the Arizona bankruptcy attorneys of The Harmon Law Office, LLC.

James Witherspoon

Article Source: http://EzineArticles.com/?expert=James_Witherspoon
http://EzineArticles.com/?Saving-Your-Home-With-Chapter-13-Bankruptcy&id=5133911

Saving Your Home With Chapter 13 Bankruptcy is a post from: Bankruptcy Court Online

Here’s a look at what went wrong with T-Boz’s bankruptcy filing, and what you can do to make sure your case proceeds more smoothly.

In Bankruptcy Court, Follow the Rules

There’s a reason that the U.S. Courts recommend working with a bankruptcy lawyer during a personal bankruptcy filing: the laws that govern the bankruptcy court are complex and outlined in difficult-to-decipher legalese. T-Boz, it seems, failed to follow the rules adequately. Here’s what happened.

• The bankruptcy petition. T-Boz filed a petition under Chapter 13 of the U.S. Bankruptcy Code, seeking a chance to repay her creditors over a period of three to five years. After filing the initial paperwork with the bankruptcy court, bankruptcy filers have a limited period of time in which to submit supplementary documents and paperwork. Failure to do so could result in the court dismissing your case.
• The repayment plan. Within 30 days of filing an initial petition, Chapter 13 filers are required to make the first payment according to the repayment plan they submitted. Those who don’t make this payment risk losing the court’s protection. T-Boz apparently listed more than $768,000 in debts, but made no effort to submit her first payment after filing her bankruptcy petition.
• The creditors’ meeting. Roughly 45 days after filing a bankruptcy petition, filers are required to attend the Creditors Meeting, at which they must attest to the truth and completeness of all information in their bankruptcy petitions. Creditors may attend this meeting (hence its name), but often do not. Because this meeting is required of all bankruptcy filers, those who do not attend risk having their cases dismissed. T-Boz, it seems, did not show up at her Creditors Meeting.

How to Keep the Bankruptcy Court’s Protection

Those who follow the rules of the bankruptcy court enjoy a powerful legal protection called the automatic stay, which prevents creditors of all types from making collection actions while a bankruptcy case is pending.

When the automatic stay is lifted, creditors are free to pursue debt collection by normal means. Because T-Boz failed to adhere to the rules set out by the bankruptcy court, she will now likely have to deal with collection actions from her creditors until she files for bankruptcy a second time, which she will be eligible to do 180 days after the dismissal of her original case.

Generally speaking, those who wish to avoid the unpleasantness of bankruptcy court dismissal may benefit from the guidance and instruction offered by a bankruptcy lawyer practicing in their state.

Here’s a look at the new fees, the old fees, and what the changes might mean for you.

New Bankruptcy Fees

Most bankruptcy filers’ primary concern is the fee charged to file the bankruptcy petition with the court.

• Chapter 13 bankruptcy: Formerly $274, the fee is now $281.
• Chapter 11 bankruptcy: Formerly $1,039, the fee has been raised to $1,046.
• Chapter 7 bankruptcy: Formerly $299, the fee has been raised to $306.

Luckily for most filers, the total increase in basic filing fees is not drastic; however, some critics of the bankruptcy system have complained that the fees were already prohibitively high for individuals truly struggling to make ends meet.

Other Bankruptcy-Related Fee Increases

In addition to the basic filing fee increases, the Judicial Conference also hiked fees associated with other parts of the bankruptcy process. The services whose fees have been altered include:

• Certification: Formerly $9, now $11;
• Exemplification: Formerly $18, now $21;
• Audio Recording: Formerly $26, now $30;
• Amended Bankruptcy Schedules: Formerly $26, now $30;
• Record Search: Formerly $26, now $30;
• Adversary Proceeding Fee: Formerly $250, now $293;
• Document Filing/Indexing: Formerly $39, now $46;
• Title 11 Administrative Fee: Formerly $39, now $46;
• Record Retrieval Fee: Formerly $45, now $53;
• Returned Check Fee: Formerly $45, now $53;
• Notice of Appeal Fee: Formerly $250, now $293; and
• Lift/Stay Fee: Formerly $150, now $176.

Which Fees Apply to My Case?

Because no two bankruptcy cases are exactly alike, it’s not easy to determine which of the fees listed might affect your bankruptcy case. As a bankruptcy lawyer can explain to you, the complexity and intricacy of your bankruptcy filing can affect the duration and costs of the case, which is affected not only by bankruptcy court fees but often by certain legal fees as well.

One way to keep bankruptcy fees to a minimum is to pay careful attention to the advice you receive from your lawyer. A lawyer may guide filers on what paperwork to prepare, how to complete bankruptcy forms, and otherwise how to proceed with a case.

Taking note of the rules and regulations that govern bankruptcy court early on in the proceedings may prevent you (and the bankruptcy judge, your trustee, or creditors) from having to return to the bankruptcy case to investigate or contest part of the information.

If you are truly unable to afford the fees associated with filing for bankruptcy, you may qualify for a bankruptcy fee waiver, about which a bankruptcy lawyer can tell you more.

Here’s a look at what’s going on with this particular bankruptcy case and what kinds of issues might prevent an individual’s Chapter 13 repayment plan from earning court approval.

Insider Trading Accusations

At present, the bankruptcy judge overseeing Washington Mutual, Inc.’s bankruptcy case has ordered the company to undergo thorough mediation with its creditors in an attempt to work out a settlement that pleases everyone.

The judge suggested this course of action because, according to reports from the Associated Press, hedge funds supporting the company’s bankruptcy used information from the filing to engage in insider trading. Had the judge approved the current repayment plan, she believed creditors would have contested the ruling because of that insider trading.

Of course, such an issue is something that only a business seeking bankruptcy protection would have to worry about. Still, in individual bankruptcy reorganizations, a court might find reason to reject a reorganization plan.

Common Reasons for Chapter 13 Plan Rejection

In Chapter 13 bankruptcy filing, filers commit to a three- to five-year repayment plan designed to help them repay debts to some or all of their creditors. Filers submit their plan to the court, which approves it depending on a number of factors. Common reasons a Chapter 13 repayment plan might be rejected include:

• Creditor objections to repayment terms: If creditors can show that they would have received more money from a Chapter 7 liquidation, they might object to the repayment plan. In the case that a Chapter 7 case would indeed better benefit creditors, the court may require a filer to file again, under Chapter 7. This is because the bankruptcy court has an obligation to both filers and their creditors.
• Insufficient commitment of disposable income: Another common problem with Chapter 13 repayment plans is that a debtor has not committed all her disposable income to the repayment plan. Chapter 13 bankruptcy is designed to help both debtors and creditors, and it is most effective when both groups adhere to its rules – for filers, that means committing the entirety of disposable income to the repayment plan.
• The repayment plan is not feasible: A plan that requires too great a commitment of money from the filer might be rejected as unrealistic, based on figures about a filer’s income and expenses. If a filer is unlikely to stick with the repayment plan for its full three- to five-year duration, the court is unlikely to approve it.

Individuals who are faced with the prospect of foreclosure may have legal options to save their homes through Chapter 13 bankruptcy. As with any legal matter, very strict conditions apply, and not everyone may qualify for this option.

When an individual declares bankruptcy, regardless of the chapter, his or her debts are placed in an automatic stay. This means that creditors, including mortgage lenders, cannot seek repayment from the individual, usually for a period of three or four months.

Under Chapter 13 bankruptcy, individuals are allowed to restructure their debts. What this means is that the individual is allowed to work out more manageable repayment plans with their lenders so that they can repay their debts over a period of time.

Home mortgages are included among the debts that individuals are allowed to restructure. However, individuals may only work out plans to repay their past due amounts. Whatever future payments arise will not change.

Because individuals are allowed to restructure their past due debts, individuals who can work out plans to repay their past due mortgage payments and who can stay current on future payments may be allowed to keep their homes.

It is important to note that individuals wishing to save their homes in this way will have to declare bankruptcy before being served with their foreclosure notices. If an individual has already been served with a foreclosure notice, then he or she may not be able to save his or her home through a bankruptcy filings.

Before deciding on declaring bankruptcy, individuals are advised to seek experienced legal help. Declaring bankruptcy may not be the best option for some individuals wishing to save their homes, but may be incredibly valuable for others.

Foreclosure and bankruptcy are both daunting and stressful. If you are facing both, you should discuss your financial options with the Arizona bankruptcy attorneys of The Harmon Law Office, LLC.

James Witherspoon

Article Source: http://EzineArticles.com/?expert=James_Witherspoon
http://EzineArticles.com/?Saving-Your-Home-With-Chapter-13-Bankruptcy&id=5133911

Saving Your Home With Chapter 13 Bankruptcy is a post from: Bankruptcy Court Online

The company appeared to have everything going for it: it had developed new technology to improve the design of existing solar panels and it emerged at a time (2008) when investors were eager to back “green” technology.

But a number of factors got in its way of success:

• Changing solar equipment prices: Solyndra apparently entered the market at a time when materials to make solar panels were expensive and watched the value of its equipment decline over time.
• Increased competition from China: When Solyndra was in its early stages, competition from China was reportedly shaky and not well established. Over the course of Solyndra’s growth, solar panels produced in China gained credibility on world markets. Plus, the Chinese government subsidizes production.
• Oversupply: Globally, more solar panels have been produced than people have been interested in buying. Part of the diminished demand can be blamed on the recession.

Learning from Bigger Bankruptcy Filings

If nothing else, the fate that Solyndra is facing serves as a welcome reminder to individuals considering filing bankruptcy. Many factors that lead people to choose bankruptcy protection are beyond any individual’s control.

In fact, bankruptcy filing surveys consistently note that top reasons people file for bankruptcy include:

• Divorce;
• A birth or death in the family;
• Job loss or reduction;
• An unexpected illness or injury; and
• Natural disasters.

As part of its Chapter 11 bankruptcy, Solyndra will likely sell off parts of itself (such as its thin-film solar technology) that are valuable, if not workable for the company at present. Individuals can learn from this, too, and consider some of the following cash-raising techniques before or during bankruptcy:

• Get a part-time gig: Many people have talents from which they make no money. As part of a bankruptcy recovery, consider selling those services.
• Lighten the load: In Chapter 7 bankruptcy, filers’ non-exempt assets are sold to raise money for creditors as part of the bankruptcy process. Chapter 13 filers could try something similar, by selling unneeded items online or via a yard sale.
• Don’t be discouraged: A number of high-profile investors (including the federal government and the Walton family of Wal-Mart fame) supported and helped fund Solyndra. Sometimes, even the best-laid plans end badly. Bankruptcy gives individuals and businesses a chance to move forward.

Here’s a look at how your online presence might affect your bankruptcy case (and why it’s so important to avoid bankruptcy fraud).

Social Media: Assets, Spending Habits, Income

The bankruptcy petition all filers must complete and submit to the bankruptcy court requires a lot of information about the state of the filer’s personal finances. Putting incomplete or incorrect information on a bankruptcy petition could result in charges of bankruptcy fraud (which can come with jail time and fines of up to $500,000) or the dismissal of a bankruptcy case.

When you’re filing out your bankruptcy paperwork, keep in mind that social media can affect all of the following.

• Asset list: You may not think of Facebook as a place where you catalog your possessions, but pictures from birthdays and holidays (and even shots around the house) often include our stuff. If you fail to mention new electronics, jewelry or other valuable items in your bankruptcy petition, a savvy trustee could comb through your Facebook pictures and find evidence that your paperwork was wrong. This could prevent you from getting your discharge or mean you have to pay for the non-exempt portion of those assets.
• Luxury expenses: In Chapter 7 bankruptcy, credit card debt is usually dischargeable (i.e. the bankruptcy court can eliminate most credit card debt). The exceptions to this rule include credit card purchases for luxury goods or services made within 90 days of filing the bankruptcy petition. So pictures online of you and your family on vacation just before you filed for bankruptcy could raise some uncomfortable questions with your bankruptcy trustee. And if the vacation was on a credit card and was within three months of submitting the bankruptcy petition, there’s a good chance you’ll have to pay those debts.
• New jobs: In Chapter 13 bankruptcy, filers are required to make repayments to their creditors over a period of three to five years. Those payments are calculated based on a filer’s disposable income at the time of the filing, although if that income changes during the course of the repayment plan, the amount of the monthly payments should change too. So if you get a raise or a great new job and tweet about it or post about it on Facebook but don’t tell your bankruptcy trustee, you could still end up having to pay more to your creditors.

Privacy in Social Media

Even if you keep your social media profiles private, you aren’t in a “protected” zone. That’s because the bankruptcy court can subpoena your online information and thus uncover anything you’ve posted online.

Bottom line: don’t lie on your bankruptcy forms. And don’t post anything online you don’t want your bankruptcy trustee to know.

What Are Escrow Accounts?

Escrow accounts are accounts set aside as part of a mortgage deal to hold money for expenses like property taxes and homeowner’s insurance. In many cases, the mortgage lender or servicer collects escrow money as part of monthly mortgage payments.

How Do Escrow Accounts Affect Chapter 13 Bankruptcy?

When a homeowner falls behind on mortgage payments, she likely also falls behind on escrow payments. This can lead to difficulties paying property taxes and other non-mortgage fees associated with homeownership.

This may become problematic if a person files for Chapter 13 bankruptcy to avert foreclosure, which is fairly common because of the foreclosure-halting powers of the automatic stay. In Chapter 13 bankruptcy cases, the following might happen to escrow accounts:

• Mortgage debts can’t be modified in bankruptcy court. This provision was established decades ago as part of efforts to encourage homeownership among Americans. But for underwater homeowners today, it can mean bankruptcy filers have great difficulty keeping their homes, because it means that homeowners must continue making payments as they agreed in their loans.
• Escrow arrearages are listed in the petition. Overdue escrow payments must be included on bankruptcy paperwork. The good news is that a recent court ruling (in the case In Re Beaudet) asserted that overdue escrow payments accrued before a bankruptcy filing can be considered non-mortgage debts. That means they can be included as part of the bankruptcy repayment plan and repaid over a three- to five-year period, possibly at a lowered interest rate.
• Future escrow debts are undefined. The bankruptcy case did not establish, though, whether missed escrow payments in the period after a bankruptcy case is filed would be considered part of mortgage debts. In other words, those who continue to have difficulty making their mortgage payments after filing for Chapter 13 may or may not be required to make escrow payments in addition to regular loan payments.

For now, Chapter 13 filers may have to rely on case-by-case judge discretion when missed escrow payments are part of a bankruptcy estate. Considering the high number of struggling homeowners, though, it’s possible that bankruptcy court rulings will decide the issue definitively in the near future.

The good news? Filing for bankruptcy may help you out of an underwater car loan (also sometimes called an “upside down” loan). Here’s a look at how things might work.

Underwater Car Loans in Chapter 7 Bankruptcy

Those who file Chapter 7 bankruptcy may handle an underwater car loan in one of three ways:

• Surrender the car. This option means giving up the vehicle and eliminating the debt connected to it. While this isn’t a practical option for those who need a vehicle, it may be useful for folks who have other transportation options.
• Redeem the car. This option lets filers repay creditors the remainder of the car’s fair market value in a lump sum. In other words, you pay your lender the car’s current value minus whatever amount you’ve already paid. This tends to benefit those with underwater loans and enough cash on hand.
• Renew the loan. This choice may work for those who do not have the cash to redeem their cars and who need them for transportation. Loan renewal equals an agreement to continue making payments as outlined in the original loan papers. Chapter 7 bankruptcy may make these more manageable by discharging other debts and thus freeing up enough money to allow for car payments.

Underwater Car Loans in Chapter 13 Bankruptcy

Chapter 13 bankruptcy requires filers to make monthly payments to their creditors over a three- to five-year period. In Chapter 13, car loans:

• Older than 910 days may be eligible for “cramming down.” This requires filers to continue making car payments, but only for the vehicle’s fair market value (not for the entire loan amount).
• Less than 910 days old generally require full repayment. However, some Chapter 13 filers are able to repay their car loans at lower interest rates than those outlined in their original loan agreements.

Determining a Car’s Real Value

If you plan on including an underwater car loan in your bankruptcy filing, it’s important to make sure you understand how car values are assessed for the court’s purposes. You have to provide a value for your car as part of your bankruptcy petition and you must swear to the accuracy of that value as part of your case.

Misleading or blatantly false information could lead to charges of bankruptcy fraud, so you may want to do some research and/or consult with your lawyer before settling on a value.

Chapter 13 Bankruptcy Basics

Though much has been made in recent years about both the individual and corporate financial struggles that are being faced due to the credit crunch and other broad economic factors, the reality is that there have always been genuine challenges to fiscal security. The free availability of consumer credit and predatory mortgage lending practices have combined to create something of a perfect storm for the debt-strapped, and when you add into the mix the fact that developing a credit history is now an essential part of progressing into adulthood, the deck seems to be stacked against the unwitting consumer. In the most overwhelming circumstances, it may be appropriate to consider filing for Chapter 13 bankruptcy protection.

Even if you have been working steadily for years and manage your money responsibly, it is likely that a single accident, serious illness, or other unpredictable and substantial adverse life event can suddenly threaten to undo all that you have built. Part of this is attributable to the dramatically escalating cost of medical care in the United States, which has considerably outpaced increases in the average income of American workers over the past decade. If you are uninsured or exhaust the benefits available under your insurance policy, you can be stuck with tens of thousands of dollars or more in medical debts for even fairly minor injuries.

Elements of Chapter 13 Bankruptcy to Consider

The United States Bankruptcy Code exists to help debtors to resolve their outstanding financial obligations to creditors and service providers. There are forms of bankruptcy that are available to businesses and others that are solely accessible to individuals and families that are suffering from economic woes. Chapter 13 bankruptcies are restricted to individual filers who are employed at the time of the bankruptcy filing and who appear to have some degree of job security.

As each chapter of the Bankruptcy Code is designed to serve a different set of needs and parties, so, too is each of processes differently structured and requiring of distinctly separate qualifications. A few of the relevant details pertaining to Chapter 13 bankruptcy are:

• Liquidation of assets is not a required step as it is with many Chapter 7 filings
• Chapter 13 bankruptcy filings stop and prevent foreclosure actions
• Debts are not erased, but rather the debtor has the opportunity to propose an extended repayment plan over a 3-5 year period
• Collection efforts must cease during the bankruptcy plan

For More Information

For further information about credit management and bankruptcy protection, contact the Arizona bankruptcy lawyers of the Harmon Law Office, L.L.C.

Joseph Devine

Article Source: http://EzineArticles.com/?expert=Joseph_Devine
http://EzineArticles.com/?The-Basics-of-Chapter-13-Bankruptcy&id=3411768

The Basics of Chapter 13 Bankruptcy is a post from: Bankruptcy Court Online