Is there a minimum amount of debt required to file bankruptcy?
This is a question I hear quite often as people contemplate filing for bankruptcy. The answer is no. The decision to file for bankruptcy relief is relative to the debtor’s financial situation. For example, it is not uncommon for someone who is living on social security or other fixed income to file for bankruptcy only owing a few thousand dollars in credit card debt.
The problem here is ridiculous interest rates coupled with people who, because of their limited incomes, are unable to make anything more than the minimum monthly payment on these debts. It creates a vicious, never-ending cycle which a bankruptcy snaps. This again comes back to the importance of seeking out and hiring an attorney who is able to competently analyze your options and help you determine the best course of action to take.
For more information please visit The Larkin Law Firm at http://www.live-debt-free-now.com
Keeping the car you love despite owing much more than it’s worth. How can bankruptcy help?
It is the exception rather than the rule that a person financing a vehicle owes less than or equal to the cars value. Unless you put at least 20% down, chances are you are upside down. Bankruptcy not only can eliminate unsecured debts like credit cards, it can also drastically reduce what you owe on your vehicle.
In a chapter 7 bankruptcy, debtors can take advantage of section 722 of the Bankruptcy Code, also known as redemption. Under section 722, a debtor may redeem personal property intended primarily for personal, family, or household use provided they pay in full to their original lender, a value equal to the price a retail merchant would charge for property in like condition. The upside of redemption is that it essentially converts secured debt to unsecured debt to the extent the value exceeds what you owe. The downside is that you have to come up with a lump sum to pay the original lender. The lump sum required will be defined as the price a retail merchant would charge for a car of that kind, considering age and condition of the property, at the time you redeem it. Often this is defined by the cars blue book listing. There are a few lenders out there who will finance people going through bankruptcy for this purpose.
Chapter 13 involves a monthly payment plan and also offers benefits for those who find themselves upside down on their vehicles. Generally speaking, if your car was purchased for you and your family’s use more than 910 days before the bankruptcy is filed, you repay only what the car is worth and not what you owe. This is called “cramdown.” The upside here is that your loan is recast up to a 5 year period reducing your monthly payment. The downside is you need to have bought your vehicle more than 910 days, or 2.5 years before the filing, unless the vehicle is primarily for business use. If that is the case then that 910 day rule does not apply. Check with a knowledgeable attorney to determine the best strategy for you.
For more information regarding redemption, keeping your personal property, or for other bankruptcy law questions, contact The Larkin Law Firm at http://www.live-debt-free-now.com
There is Life After Bankruptcy! See the New General Motors After-Bankruptcy Commercial- This Could Be You!
Despite what most people think, there is life after bankruptcy. GM just put out a good commercial in this regard, and its platform can be applied to individuals and businesses alike. As is the case with GM, sometimes it’s best to regroup before moving forward. Click here to see the commercial: http://www.youtube.com/watch?v=a-oEudd6AYM For more information go to http://www.live-debt-free-now.com
I received a “Notice of Abandonment” from the Bankruptcy Trustee! What does that mean?
When a debtor receives a “Notice of Abandonment” from the bankruptcy trustee, they should not be alarmed. The title of the document oftentimes scares debtors into thinking they are going to lose the property listed in the notice, which is not the case. Basically, a notice of abandonment is the bankruptcy trustee’s way of saying that for one reason or another, the listed property cannot be liquidated for the benefit of your creditors. When a bankruptcy case is filed, real and personal property become part of a “bankruptcy estate” which the trustee is in control of. Once the trustee reviews the case and determines he cannot make any money for creditors by liquidating specific assets, they will file an abandonment notice on these items.
The most common reason the trustee abandons an asset is because it is burdensome to the estate. For example, if you have a car worth $10k but owe $15k on it, the trustee will abandon the car because if he were to sell it he would have to first pay off $15k to the vehicle lender. If the car is only worth $10k, there would be no money left over to pay any other creditors. The same is true for real estate. If you owe more than your home is worth, or if the costs of selling the home (ie. Realtor fees etc.) eat up any money available for creditors, then the trustee will abandon the asset back to you.
Upon abandonment, the property is your to do with what you choose and is no longer part of the bankruptcy process.
For more information go to http://www.live-debt-free-now.com
