Neither Chapter 7 nor Chapter 13 stops ongoing child/spousal support payments. But Chapter 13 CAN stop collection of support arrearage. Most Debts Filing bankruptcy stops—or “stays”—the collection of most debts. (See Section 362(a) of the U.S. Bankruptcy Code about the “Automatic Stay.”) Then at the end of the bankruptcy case most debts are discharged—legally written off. (Sections 727 and 1328 of the Bankruptcy Code.) At that point … Read More
Unexpected Benefit: Use Chapter 13 to Escape a Tax Payment Plan
Chapter 7 can sometimes help you deal with unaffordable income tax payment plan. But Chapter 13 is often a better way to escape a tax mess. Tax Agreement Payments Too High We laid out the problem last week. You’d entered into a monthly payment plan with the IRS or your state because you couldn’t pay what you owed. But … Read More
Unexpected Benefit: Use Chapter 7 to Escape a Tax Payment Plan
Breaking an IRS/state income tax payment plan usually has very bad consequences. But filing bankruptcy lets you escape a tax payment plan. Tax Installment Agreement You Can’t Afford It’s a common problem. You owed income taxes a year or two ago when you sent in your tax returns. Money was very tight so you couldn’t just pay it … Read More
Unexpected Benefit: Get Back Your Just Repossessed Vehicle
File bankruptcy before your lender takes your vehicle. But if you couldn’t, bankruptcy may still get back your just-repossessed vehicle. When Does a Lender Repossess a Vehicle? When CAN a vehicle lender repossess your vehicle? Just about all vehicle loan contracts let the lender repossess the minute you are late on a payment. There may be a legal grace … Read More
Unexpected Benefit: Reinstate Your License Suspended for Unpaid Tickets
Bankruptcy may be able to reinstate your license suspended for unpaid traffic tickets. Depends on whether the laws violated are crimes. We’re deep into a series of blog posts about powerful, less familiar benefits of bankruptcy. One important one is reinstating your suspended driver’s license. Whether bankruptcy can reinstate your license depends a lot on the reason for the … Read More
Unexpected Benefit: Reinstate Your Suspended Driver’s License
Bankruptcy can reinstate your suspended driver’s license. Depends. Can likely if it was suspended for an unpaid debt from an accident. We’re continuing a series of blog posts about the powerful but less obvious benefits of bankruptcy. Bankruptcy gives you immediate and long-term relief from your debts. But it can do other very important things you may not know … Read More
Unexpected Benefit: Remove a Judgment Lien from the Title to Your Home
Usually you can’t change a secured debt into an unsecured one, even in bankruptcy. But you often CAN remove a judgment lien from your home. We’re on a series of blog posts about the powerful but less obvious benefits of bankruptcy. Bankruptcy can do much more than just give you immediate and long-term relief from your debts. Today we … Read More
Unexpected Benefit: Resolve Your Preference Problem through Chapter 13
You can avoid the risks involved with dealing with the Chapter 7 trustee if you resolve your preference problem through Chapter 13. Our last several blog posts have been about the problem of preference payments: 3 weeks ago we introduced the problem resulting from paying a favored creditor before you file bankruptcy 2 weeks ago we discussed avoiding the … Read More
Unexpected Benefit: Negotiate Out of a Preference Mess
Your lawyer can likely negotiate with your Chapter 7 trustee to prevent the forced repayment of your prior payment to a relative or friend. Our blog post two weeks ago introduced an uncomfortable problem: preference payments to a friendly creditor. (Please read that blog post before reading this one.) Then last week we discussed two possible solutions to this … Read More
Unexpected Benefit: Ways to Resolve a Preference Mess
A possible preference mess is the forced repayment of your pre-bankruptcy payment to a relative or friend. Here are two solutions. Last week’s blog post introduced an uncomfortable problem: preference payments to a friendly creditor. (If you haven’t already please read that one before reading further here.) The Solutions We ended that blog post by listing and giving short … Read More
Unexpected Benefit: Prevent the Forced Repayment by a Favored Creditor
Prevent the forced repayment of a pre-bankruptcy payment to a relative or friend. If other solutions don’t work, Chapter 13 usually will. Our last two blog posts have been about one of the more confusing parts of bankruptcy: the law of preferences. This law says that if a creditor takes or receives money from you within the 90 days … Read More
Unexpected Benefit: Use Money from a “Preference” to Pay a Special Debt
Preference law allows you to use money that you paid a creditor before bankruptcy to pay another creditor, one that you want to be paid. Last week we introduced the law of preferences. This law says that if a creditor takes or receives money from you within the 90 days before you file your bankruptcy case, the creditor may need … Read More
Unexpected Benefit: Force a Creditor to Return Your Money
Filing bankruptcy stops garnishments and collections, but it also may be able to make a creditor return your money recently taken from you. Bankruptcy’s “automatic stay” is one of the most immediate and powerful benefits of filing bankruptcy. It immediately stops almost all creditor collection actions against you, your income, and your assets. See Section 362 of the U.S. Bankruptcy Code. … Read More
12 Unexpected Benefits of Bankruptcy
Bankruptcy gives you immediate and long-term relief from your creditors. But there are many other unexpected benefits of bankruptcy. The next 12 blog posts will be about some of the most powerful and surprising benefits of bankruptcy. You’re likely considering bankruptcy because you need financial relief. You need immediate relief from debt collection pressures. You need long-term relief from having to pay … Read More
Beyond Paying Your Chapter 13 Plan
To finish your case successfully, sometimes beyond paying your Chapter 13 plan you may need to pay a debt directly and do some other things. The bankruptcy court’s approval of your payment plan (at the Confirmation Hearing) happens about 2-to-4 months after filing your case. At that point your Chapter 13 case is fully on its way. You likely … Read More