Avoid foreclosure with the Home Affordable Refinance Program (HARP) or the Home Affordable Modification Program (HAMP). In 2009, the federal government unveiled the Making Home Affordable program to help homeowners stay in their houses and avoid foreclosure. If your loan is owned or controlled by Freddie Mac or Fannie Mae, and you’re current on your…
Learn More »Taking the following steps will help your family if you die or become incapacitated. 1. Make a financial power of attorney. With a durable power of attorney for finances,you can give a trusted person broad authority to handle your finances if you become incapacitated and unable to handle your own affairs. This person is called…
Learn More »Perhaps you have heard a story about an employee that has embezzled from a company. Some may shake their heads in disgust and then shrug it off thinking that it will not happen to their company. Others may hope that it never happens to their company, but take no steps to prevent it from happening. …
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For some debtors, Chapter 13 bankruptcy is a better option than Chapter 7 bankruptcy. And sometimes Chapter 13 is the only option because a debtor is not eligible for Chapter 7 bankruptcy.
It’s important to sort out the issues and decide which form of bankruptcy is best for you. Many debtors assume that Chapter 7 is better than Chapter 13 because Chapter 13 requires debtors to repay a portion of debt, whereas Chapter 7 wipes out most debts. (To learn more about Chapter 7 bankruptcy, see Nolo’s article A Chapter 7 Bankruptcy Overview.) But this is not always the case. Here are some good reasons to file for Chapter 13 bankruptcy.
Some debtors cannot file for Chapter 7 — leaving Chapter 13 as the only option. You cannot file for Chapter 7 if both of the following are true:
The means test can get fairly complex — and, to make matter worse, Congress has its own definitions of “disposable income,” “current monthly income,” “expenses,” and other important terms, which sometimes operate to make your income seem higher than it actually is. You can find step-by-step instructions to determine if you qualify for Chapter 7 under these new rules in How to File for Chapter 7 Bankruptcy, by Stephen Elias, Albin Renauer, and Robin Leonard (Nolo).
In addition, if you have received a Chapter 7 bankruptcy discharge within the last eight years, or a Chapter 13 discharge within the last six years, you may not file for Chapter 7 bankruptcy.
Even if you are eligible for Chapter 7 bankruptcy, there are some situations when filing for Chapter 13 may be more advantageous than filing for Chapter 7.
You are behind on your mortgage or car loan, and want to make up the missed payments over time and reinstate the original agreement. You cannot do this in Chapter 7 bankruptcy. You can make up missed payments only in Chapter 13 bankruptcy.
You have a tax obligation, student loan, or other debt that cannot be discharged in Chapter 7. You can include these debts in your Chapter 13 plan and pay them off over time.
You have a sincere desire to repay your debts, but you need the protection of the bankruptcy court to do so. This might be the case if creditors are coming after you, or if you simply require the formal structure and deadlines the Chapter 13 process provides in order to follow through on your good intentions.
You have nonexempt property that you want to keep. When you file for Chapter 7 bankruptcy, you get to keep only exempt property — property that is protected from creditors under state or federal law. You have to give your nonexempt property to the bankruptcy trustee, who can sell it and distribute the proceeds to your creditors. In Chapter 13, you don’t have to give up any property. Instead, you repay your debts out of your income. So, if you have nonexempt property that you can’t bear to part with, Chapter 13 might be the better choice.
You have a codebtor on a personal debt. If you file for Chapter 7 bankruptcy, your codebtor will still be on the hook — and your creditor will undoubtedly go after the codebtor for payment. If you file for Chapter 13 bankruptcy, the creditor will leave your codebtor alone, as long as you keep up with your bankruptcy plan payments.
For additional help deciding which bankruptcy is right for you, see The New Bankruptcy: Will It Work for You?, by Stephen Elias (Nolo). Or, for help filing Chapter 13, see Chapter 13 Bankruptcy: Keep Your Property & Repay Debts Over Time, by Stephen Elias and Robin Leonard (Nolo).
Copyright Nolo – http://www.nolo.com — Reprinted with Permission
Avoid foreclosure with the Home Affordable Refinance Program (HARP) or the Home Affordable Modification Program (HAMP). In 2009, the federal government unveiled the Making Home Affordable program to help homeowners stay in their houses and avoid foreclosure. If your loan is owned or controlled by Freddie Mac or Fannie Mae, and you’re current on your…
Continue Reading »Taking the following steps will help your family if you die or become incapacitated. 1. Make a financial power of attorney. With a durable power of attorney for finances,you can give a trusted person broad authority to handle your finances if you become incapacitated and unable to handle your own affairs. This person is called…
Continue Reading »Perhaps you have heard a story about an employee that has embezzled from a company. Some may shake their heads in disgust and then shrug it off thinking that it will not happen to their company. Others may hope that it never happens to their company, but take no steps to prevent it from happening. …
Continue Reading »Mediation is cheaper, faster, and more amicable than taking a dispute to court. Small businesses may benefit tremendously from using mediation — rather than litigation — to resolve conflicts. Small business owners are just as likely as major corporations to run into conflict with neighboring businesses, employees, customers, vendors, or with their own business partners,…
Continue Reading »When and how to ask a court to change the amount of child support you must pay, or the amount you receive. Many people these days are having trouble either making child support payments or caring for their children on their existing child support because of a change in their work or living situation. If…
Continue Reading »A client was fired from her job after she complained about sexual harassment by a supervisor. We negotiated a settlement with her employer. Learn more.
Continue Reading »Bringing practical advice and passionate advocacy to your community, home or office. View the Mobile Unit’s schedule to see when it may be near your community! We strongly believe that everyone deserves the same access to professional legal counsel, no matter where you may live or work. Thompson Law Office’s Mobile Unit serves clients throughout…
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