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Bankruptcy

• Bankruptcy, Can I Discharge Payday Loans, IRS Debt, Student Loan, Medical Bills or Child Support
• Bankruptcy Options: When You Have More Month Than Money Chapter 13 May Be Able To Help
• Can President Obama Your Save Your Home?
• Can I Rebuild My Credit After Bankruptcy?

Bankruptcy, Can I Discharge Payday Loans, IRS Debt, Student Loan, Medical Bills or Child Support

Am I eligible to file Chapter 13 bankruptcy?

One of the main criteria that determines whether you are eligible to file Chapter 13 bankruptcy is the amount of debt you currently have. To be eligible to file Chapter 13 bankruptcy, you must have less than $336,900 in unsecured debt and less than $1,010,650 in secured debt.

In order to file for Chapter 13 bankruptcy, you must also reside in the United States and have a regular income. Specifically, you must be able to show the court that you have sufficient income to meet your repayment obligations. Additionally, you must have received credit counseling within the preceding 180 days.

Other criteria that must be met in order to file for Chapter 13 bankruptcy are:

•You must not have been granted a Chapter 7 bankruptcy discharge in the past 4 years.
•You must not have been granted a Chapter 13 bankruptcy discharge in the past 2 years.
•You cannot have had a bankruptcy petition dismissed within the past 180 days because of failure to appear before the court, failure to comply with a court order or a voluntary dismissal after your creditors tried to recover property through the bankruptcy court.
•You must have filed both your federal and state income tax returns for the four years preceding your bankruptcy filing date.

Is child support dischargeable in bankruptcy?

Non-custodial parents facing mounting debts sometimes turn to bankruptcy as a way to get out from under their financial burdens. However, child support is not dischargeable in bankruptcy.

In fact, the Bankruptcy Reform Act of 1994 in part provides greater protection for debts owed to children and former spouses. These “domestic support obligations,” as they are sometimes referred to, are given high priority over other debts by the courts.

Also, if you owe back child support payments, you will still be responsible for those payments even if you successfully file for bankruptcy.

While bankruptcy will not relieve a parent of current or back child support obligations, it may still be a way to get back on track with your payments. By discharging other unsecured debts, such as credit card bills, you will free up money that can be put towards your domestic support obligations.

Are payday loans dischargeable in bankruptcy?

Payday loans, also known as cash advances, are short-term loans made at a high interest rate. Payday loans are typically made for a relatively small amount of money, but because of the high interest rate, the debt can quickly spiral out of control.

In most cases, payday loans are dischargeable in Chapter 7 bankruptcy. Payday loans are a form of unsecured debt, and virtually all unsecured debts are discharged in Chapter 7 bankruptcy.

Chapter 7 bankruptcy and IRS tax debt

Some, but not all, tax debts are dischargeable in Chapter 7 bankruptcy. In order to have your tax debts discharged under a Chapter 7 bankruptcy, you must meet all five of the following conditions:

1.The debts are income taxes. Taxes other than income tax, such as fraud penalties, cannot be discharged in bankruptcy.
2.You filed a tax return for the debt you want to discharge at least two years before filing for bankruptcy.
3.The tax debt is at least three years old.
4.You pass the 240-day rule. This rule requires that your tax debt was assessed by the IRS at least 240 days before you filed for bankruptcy, or, alternatively, that the debt has not yet been assessed.
5.You have not committed tax fraud or willful tax evasion.
Note that you cannot discharge a federal tax lien under Chapter 7 bankruptcy. If the IRS already recorded a tax lien on your personal property before you filed for bankruptcy, then the tax lien will remain in place. The upshot is that you have to pay off the lien before you are allowed to sell the property.

Can student loans be discharged in bankruptcy?

Typically student loans are not discharged in bankruptcy. In order to have your student loans discharged, you must be able to show that repaying your student debt will impose an “undue hardship” on you and your dependents.

It is difficult, but not impossible, to make this showing. However, you generally will not be able to prove undue hardship unless the court finds that you are physically unable to work and have no chance of gaining future employment.

In order to have your student loans discharged, you must file a separate motion and present your case to a judge. Both privately funded and federally funded student loans are treated the same way.

How to Get Rid of a Second Mortgage through Chapter 13 Bankruptcy

Under a 1992 decision by the U.S. Supreme Court called Dewsnup v. Timm, a second mortgage or lien stripping can only be accomplished in a Chapter 13 bankruptcy. Chapter 13 is intended for people with regular income or earnings to pay back a portion of their debts over time approved by the bankruptcy court.

In the Northern District of Texas, the process begins by filing a petition for Chapter 13 bankruptcy. You must also file a plan with the court to repay creditors all or part of the money that is owed to them using your future income. Depending on your income a repayment plan can take three or five years. In order to remove an unsecured second mortgage, the fair market value of the home must be less than the balance owed on the first mortgage.

The plan must be approved before it can take effect. If the bankruptcy court grants the motion, it will issue an order directing the holder of the second deed of trust to remove the lien from the home. The type of loan you hold does not matter during this process.

Fears | Nachawati has law offices throughout Texas, including Dallas, Ft. Worth, Houston, Austin and San Antonio. Our Dallas and Ft. Worth offices serve Plano, Arlington, Carrolton, Cleburne, Irving, Grand Prairie, Denton, Frisco, McKinney, Garland, Mesquite, Richardson, Rowlett, Rockwall, Greenville, Terrell, Waxahachie, De Soto, Duncanville, Cedar Hill, Everman, Crowley, Mansfield, Haltom City, Granbury, North Richland Hills, Flower Mound, Bedford, Hurst, Euless, University Park, Highland Park, and elsewhere in Dallas County, Tarrant County, Collin County, Johnson County, Kaufman County, Navarro County, Ellis County, Rockwall County, Denton County, and Hunt County.