You’re not likely to be accused of creating a fraudulent debt. But if so, bankruptcy can stop its collection. And resolve the problem. Most Debts are Discharged (Permanently Written Off) in Bankruptcy The federal Bankruptcy Code has a list of the kinds of debts that filing bankruptcy does not discharge. This list details the conditions under which discharge does … Read More
Unexpected Benefit: Use Chapter 13 to Permanently Stop Student Loan Collection
Chapter 13 bankruptcy can help you permanently stop student loan collection. It gives you more time and flexibility to show “undue hardship.” The Much Better Chapter 13 “Automatic Stay” Last time we explained how bankruptcy’s “automatic stay” immediately stops student loan collections against you. But if you file a Chapter 7 bankruptcy this protection from collections lasts only the … Read More
Unexpected Benefit: Use Chapter 7 to Permanently Stop Student Loan Collections
Chapter 7 bankruptcy can temporarily stop student loan collections. Here are several ways it can stop these collections permanently. Bankruptcy gives you tools to deal with special debts—including those you can’t easily write off. Last week we got into income taxes. Today we discuss student loans, focusing on this special kind of debt in Chapter 7 “straight bankruptcy.” Next … Read More
Unexpected Benefit: Use Chapter 13 to Permanently Stop Income Tax Collection
Bankruptcy can help you permanently stop income tax collection. That’s true even with more recent taxes that cannot be written off. The Automatic Staying, and the Discharge, of Income Tax Debts Sometimes people are surprised to learn that filing bankruptcy gives you power over income taxes. It does so in two big ways. First, filing bankruptcy stops the IRS … Read More
Unexpected Benefit: Use Chapter 13 to Stop Collection of Support Arrearage
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