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Library

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?

Can President Obama Your Save Your Home?

When President Barack Obama was campaigning for the presidency he promised reforms to the process of bankruptcy. For example, he called for a change in the bankruptcy code to allow modification of the terms of loans on the debtor’s primary residence. This means that hopefully one day soon the bankruptcy court will be able to adjust your home loan to a fair and reasonable payment. But while all of this is being played out, many people are still losing their homes.
One of the key factors in saving your home is being able to stay in your home as long as possible so that you can re-negotiate your mortgage with your lender. If you live in Austin, Texas, one of the best ways to get some control over your home loan (and the rest of your finances) is to file for bankruptcy. When you file for bankruptcy, your home cannot be foreclosed on or sold. This can definitely help you get your financial situation together while the government is trying to get theirs!

If you are in danger of losing your home, filing for bankruptcy can be a very powerful tool as it can give you the time and resources to renegotiate your mortgage with your lender while saving your home. For a free bankruptcy consultation contact bankruptcy law firm, Fears | Nachawati via toll free at 1- (866) 705-7584 or via e-mail at info@fnlawfirm.com.

Chapter 13 Bankruptcy: Secured and Unsecured Debt

Individuals facing a financial crisis are concerned that by filing Chapter 13 they will lose their home to repay debts. In a Chapter 13 bankruptcy, you don't have to give up any property, but you are required to use your income to pay some or all of your debt over time. Depending on the size of your debts and income it can take from three to five years.

The most important part of your Chapter 13 paperwork will be the repayment plan as this will list the secured and unsecured debt you have. Your repayment plan needs to be carefully drawn up to show how much you will pay towards your secured and unsecured debts. The plan must show any disposable income you have left after making required payments on secured debt. You also need to demonstrate how much will go towards repaying your unsecured debts, such as credit card or medical bills. Many times you will not have to pay your unsecured debt or will only have to pay pennies on the dollar.

What Is Chapter 13 Bankruptcy?
A chapter 13 bankruptcy is also called a “reorganization plan” or a “wage earner's plan.” A debtor who files a chapter 13 bankruptcy intends to repay all or part of her debts in installments to creditors over three to five years. The individual’s repayment plan term cannot exceed five years.

There are a number of advantages that chapter 13 affords to debtors. The most significant is the ability to stop a home foreclosure and force the creditor to accept payments for any delinquent mortgage payments. The bankruptcy automatic stay stops foreclosure proceedings immediately upon the debtor’s bankruptcy filing with the court. However, this temporary relief may be lost if the debtor fails to make the regular mortgage payments that come due after the chapter 13 filing.

Another advantage of chapter 13 bankruptcy is that a debtor may modify a secured loan and repay it over the plan term. This usually lowers the monthly payment. In certain circumstances the debtor can also “cram-down” the secured loan by stripping away the unsecured portion of a debt. For example, a debtor may owe $20,000 on a car that is only worth $10,000. Chapter 13 may allow the debtor to modify this loan and only pay the creditor the value of the car, or $10,000. There are special qualifying rules for this type of modification, so be sure to discuss your situation with your attorney.

Within 15 days of the filing of the chapter 13 bankruptcy petition, the debtor must file a proposed repayment plan with the court. The plan is also sent to the U.S. trustee and all creditors for review and opportunity to object. The plan must provide for regular fixed payments to the trustee who then distributes the funds to creditors according to the terms of the plan (which may be less than full payment on their claims). It is common for a chapter 13 plan to propose to pay secured creditors in full and nothing to unsecured creditors. This largely depends on whether there is “extra” money at the end of the month after the debtor’s secured creditors and monthly expenses are paid.

Occasionally circumstances change after confirmation of the chapter 13 plan that prevents the debtor from completing the repayment plan. The debtor may ask the court to allow the debtor to modify the plan, or to grant a “hardship discharge” and end the case early. Otherwise, at the end of the three to five year repayment period the court will discharge the debtor’s remaining debts that are not “non-dischargeable” by law. The chapter 13 bankruptcy discharge prevents those creditors from seeking payment from the debtor.

If you are over-burdened with secured debts and are in need of relief, consult with an experienced bankruptcy attorney about your rights under chapter 13 of the bankruptcy code.

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.