What Are Your Best Bankruptcy Options?
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Your Financial Fresh Start
Few bankruptcy cases in today’s world are “simple” anymore. Filing bankruptcy under the wrong chapter or when there is no need to can result in unfortunate consequences – sometimes extreme.
The proper preparation of a Chapter 7 or Chapter 13 personal bankruptcy case requires a detailed review of many items. The typical Bankruptcy Case today is not what it was prior to the Bankruptcy Code Amendments in 2005 and the Real Estate Crisis of 2008. Fewer bankruptcy cases are actually simple anywmore. A case may present a wide variety of issues such as valuation and title of real estate, “lien stripping of mortgages,” exempt property, income, expenses, “means test,” dischargeability of debt, and taxation that require a bankruptcy attorney to have knowledge in a broad range of fields in addition to bankruptcy law.
Chapter 13 gives a person the opportunity to work with their bankruptcy lawyer to formulate a chapter 13 plan to reorganize their debt, including mortgages, association liens, property taxes, income taxes, and credit card debt under a 3 to 5 year chapter 13 plan of reorganization. Chapter 13 is also used by those for whom chapter 7 is not appropriate, usually those with a significant amount of non-exempt property or those who do not “pass” the chapter 7 “means test.”
Chapter 7 Bankruptcy
Chapter 7 is usually used by individuals with little non-exempt property and lower incomes. But sometime persons who qualify for chapter 7 need to file a chapter 13 case as it offers the person that has needs that chapter 7 cannot provide – such as the need to modify their mortgage or car loan and to provide for payoff of IRS debt over time.