Tag Archives: Chapter13Bankruptcy

Do I Qualify for Chapter 13 Bankruptcy?

While no one relishes the idea of filing for bankruptcy, it may be the best option to get out from suffocating debt. Chapter 13 bankruptcy is a type of bankruptcy that many debtors use. However, to file under Chapter 13, you will first need to find out if you meet standards to qualify for Chapter 13 bankruptcy. Difference Between Secured and Unsecured Debt Unlike secured debts, unsecured debts are not secured by property. This means that creditors cannot take property away from you to satisfy debts. Common examples of unsecured debts include: Medical fees Lawyer fees Credit card bills Utility fees Student loans Secured debts are tied by way of liens to property which creditors can seize as payment for debt. Who Qualifies for Chapter 13? According to United States Courts, if your unsecured debt totals less than $394,725 and your secured debt is no more than $1,184,200, you may…
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Why Are More Senior Citizens Applying for Bankruptcy?

Bankruptcy occurs when the “legal status of a person or other entity cannot repay debts to creditors.” In the U.S., filing for bankruptcy is usually a last resort for people after they have failed to pay off their debts. However, a recent study by the Social Science Research Network highlights a trend of bankruptcy increasing among older Americans. According to the study, the bankruptcy rate for senior citizens increased by 200 percent from 1991 to 2016. Why Are Senior Citizens Filing for Bankruptcy? Lower incomes, unaffordable health care costs and a national drop in pension fees contributed to this new trend. Although Medicare provides great coverage for senior health care, it is unable to cover everything. Medicare may not cover dental care, hearing aids, eye exams and other procedures. Medicare often requires copays, coinsurance, and other deductibles that can prove to be difficult to afford. Forty-one percent of the average…
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What Are Cramdowns in Chapter 13 Bankruptcy?

Chapter 13 bankruptcy allows thousands of people to reorganize their debt so they can make serious progress towards paying it off. In most cases, petitioners are able to hold onto most, or all, of their assets. However, some cases are different, and collateral property, such as a home or car, may be vulnerable to repossession. In those cases, it may still be possible to save your property by using cramdowns. What Are Cramdowns? Cramdowns in Chapter 13 bankruptcy are used to lower the principle balance of a certain debt to equal the value of the collateral property. This will usually prevent the creditor from taking the asset, allowing you to continue paying off a portion of the debt and keep your car or other property. Benefits of Cramdowns in Chapter 13 Bankruptcy Cramming down debts in Chapter 13 bankruptcy can help you to lower monthly payments, and stretch them out…
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What If a Creditor Rejects Your Payments?

If you have a large outstanding debt, chances are that it will eventually go to a collection agency. These agencies use harassing techniques to get what money they can from you, including multiple phone calls a day and letters. In order to make it stop, you may be able to work out a settlement deal with them, but it doesn’t always work out. In some cases, a creditor or a collection agency may even refuse to accept payments from you. What If a Creditor Rejects Your Payments? Although a creditor or a collection agency can choose to accept settlement deals for less than the original amount, they are not required by law to do so. Not only can a collection agency demand the full amount, but many states allow them to add on extra fees and interest rates if the debt remains unpaid. What Can You Do If Your Settlement…
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How Do I Choose Between Chapter 7 Bankruptcy and Chapter 13 Bankruptcy?

Chapter 7 bankruptcy and Chapter 13 bankruptcy are similar in that they both offer people a fresh start and a chance to eliminate some – or even sometimes all – of their debts. The similarities between the two forms of bankruptcy generally stop there. Choosing which chapter of bankruptcy is the better option for your situation can appear difficult, but it becomes much easier once you learn a little bit about the two. Chapter 7 Bankruptcy vs. Chapter 13 Bankruptcy Chapter 7 bankruptcy is much quicker than Chapter 13. Petitioners typically go through the entire bankruptcy process and come out with little or no debt within a few months. Chapter 13 bankruptcy usually takes about three to five years because it allows those who file some time to pay back what they can before discharging the rest of their debt. Chapter 13 bankruptcy is more common among those with regular…
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