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In Chapter 13, in Virginia, your mortgage payment needs to be on-the-dot current.
Paying your mortgage payment by the 14th of the month (or later) gets your Chapter 13 case thrown out at the goal line. That’s because of a local bankruptcy rule, Rule 3002.1-1 in the Eastern District of Virginia
Why? Your mortgage is due on the first. They may give you a grace period until the 15th, but it’s due on the first. When you make your last Chapter 13 payment, the Chapter 13 trustee is required by Bankruptcy Rules 3002.1 to ask the mortgage company if you are current. That rule was considered a big victory for the consumer when it passed. The mortgage company had to say if they thought you were current or behind.
If you are your mortgage on the 14th instead of the first, your Chapter 13 will be disqualified at the goal line.
In this court, that victory turned into a nightmare, in a case called Evans. Now, if the mortgage company says you haven’t yet made this month’s payment, Thomas Gorman, the Chapter 13 Trustee, tells the Judge that your case should be thrown out. Unless you get caught up–and the mortgage company agrees in writing you are caught up–your case is tossed out. You are disqualified at the goal line.
What Should You Do?
When you are at the third to last payment on your Chapter 13, catch up the house! Make the mortgage payment on the first of the month. Eat oatmeal for a month, borrow from family, stop your 401k contribution, cut expenses everywhere. Get the mortgage payment in on the first of the month. Do what you have to do.
There is a detour
Suppose instead of being two weeks behind, you are three months behind on your mortgage payment. Sometimes that’s better. Why? The mortgage company will likley go to the judge and ask that your house be taken out of the Chapter 13 bankruptcy. That’s called relief from the automatic stay. If your house is taken out of the Chapter 13, then this problem doesn’t come up. The Chapter 13 Trustee won’t ask the mortgage company at the end 0f the case if you are current, and the judge won’t throw your case out.
Of course you do have to catch the house up outside of the bankruptcy.
If you are close to the end of the case and sitting a few months behind, you may want the mortgage company to take your house out of the bankrutpcy by relief from the automatic stay. If you can get close to caught up, they won’t forclose you. And the rest of your Chapter 13 debts can be cleared at discharge.
But if you are only close to caught up and the house is still inside the bankruptcy, your Chapter 13 is thrown out at the goal line. Those other debts you were paying in Chapter 13? They can all come back.
Do We Need to Talk?
Are you close to the end of your case and still struggling with the mortgage? Not sure what to do? Call Vanessa at 703-335-7793 and set up a time for us to talk.
The post Your mortgage payment needs to be on-the-dot current appeared first on Robert Weed Bankruptcy Attorney.
SBA EIDL Loans & the Case of the “Missing Guarantee”Many clients have recently contacted us with a similar issue. They claim they never personally guaranteed their SBA loans. However, after their SBA loans defaulted, the SBA is reaching out to them, stating that they did personally guarantee their business's SBA EIDL loan and are requesting payment.For context, federal law requires a personal guarantee when an SBA loan exceeds $200,000.There appear to be two scenarios where the "Missing Guarantee" issue arises. First, the SBA made a loan to a business exceeding $200,000 and failed to require an individual to sign a guarantee. Second, the SBA initially loaned less than $200,000 to a business, then provided an additional amount exceeding $200,000 by amending the loan documents but did not require the borrower to sign a guarantee.According to SBA records, since the loan exceeded $200,000, it should have been guaranteed.What should one do in this situation?Under New York law, a guaranty must be in writing to be enforceable. In Ashkir v. Wilson, No. 98 Civ. 2632, 1999 WL 710788, at *9 (S.D.N.Y. Sept. 13, 1999), it was stated that an agent is not personally liable for the obligations of his principal unless there is a written and signed personal guarantee.In European American Bank & Trust Co. v. Boyd, 516 N.Y.S.2d 714, 716 (2d Dept 1987), it was affirmed that a guarantee is enforceable as long as it is signed by the guarantor.While each state's law regarding guarantees may vary, most states require that a guarantee be in writing and executed to be enforceable.Our advice to individuals in these situations is: 1. Check your SBA loan documentation to ensure you did not sign a guaranty. 2. Request that the SBA send you a copy of an executed guaranty. 3. If the SBA cannot produce the guaranty, your position should be that you are not personally liable to repay the loan upon default. If the SBA were to litigate this position, we believe you would prevail, especially in New York State.
We advise all SBA borrowers with a case involving a "Missing Guaranty" to discuss their case with an experienced attorney as soon as possible.
Jim Shenwick, Esq 917 363 3391 [email protected] Please click the link to schedule a telephone call with me.https://calendly.com/james-shenwick/15minWe help individuals & businesses with too much debt!
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Discover the Basic Requirements for Chapter 13 Bankruptcy Eligibility
When facing financial difficulties, you might wonder if Chapter 13 bankruptcy could be the right choice for you. If you’re considering this option, our Chapter 13 bankruptcy attorney in Oregon can guide you through the eligibility requirements and assist in filing your case correctly.
Chapter 13 allows you to create a plan to pay off your debts over time while keeping your property. This article will guide you through the basic eligibility requirements and what you must consider before filing. Knowing whether you can file for Chapter 13 is the first step toward finding relief from your financial stress.
Quick Summary:
- Chapter 13 bankruptcy helps you reorganize your debt and create a manageable repayment plan. By filing Chapter 13 bankruptcy in Salem, Oregon, you can keep your property, like your home and car, while paying off your debts over three to five years. This option is suitable for individuals with a steady income who need time to catch up on overdue payments. Unlike Chapter 7, which often eliminates debts, Chapter 13 allows you to keep your assets and repay based on your income and expenses. The court will approve a repayment plan that works for your financial situation.
- To qualify for Chapter 13 bankruptcy in Oregon, you must meet specific eligibility requirements. These include having a regular income, ensuring your total debts are below certain limits, and completing a mandatory credit counseling course. You must also be aware that some debts, like student loans, child support, and alimony, cannot be included in a Chapter 13 repayment plan. Additionally, your previous bankruptcy history can impact your eligibility, as you must wait a set period before filing again after a past discharge. Meeting these requirements will allow you to reorganize your debts and begin working toward financial stability.
- Filing for Chapter 13 bankruptcy in Salem, OR, provides several benefits for those struggling with debt. It allows you to create a repayment plan based on your income and budget, which you pay monthly to a trustee. The automatic stay stops creditors from contacting you or taking legal actions, providing relief from harassment. Additionally, Chapter 13 may help eliminate remaining unsecured debts like credit card and medical bills after the repayment period. It also offers protection against foreclosure or repossession, giving you time to catch up on missed mortgage or car payments.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a way to reorganize your debt and create a repayment plan that fits your financial situation. Filing Chapter 13 bankruptcy in Salem, Oregon, allows you to keep your property, such as your home or car, while paying off your debts over three to five years. This type of bankruptcy is for people who have a steady income and need time to catch up on overdue payments.
Unlike Chapter 7 bankruptcy, which often wipes out debts, Chapter 13 offers a way to manage your debt and avoid losing your assets. The court will approve a plan that makes it possible for you to pay off what you owe based on your income and living expenses.
What are the Basic Eligibility Requirements for Chapter 13 Bankruptcy?
If you’re considering Chapter 13 bankruptcy in Oregon, it’s essential to know if you meet the eligibility requirements. This type of bankruptcy allows you to reorganize your debt and create a repayment plan based on your income. However, not everyone is eligible for Chapter 13. You must meet the following requirements to qualify:
Regular Income
To qualify for Chapter 13, you must have a regular source of income. This could be from your job, self-employment, or other stable sources. The court will want to see that you can make monthly payments toward your debt. Without a consistent income, you may not be able to meet the payment plan requirements. Having a steady income helps prove that you can follow through with the repayment plan.
Debt Limits
Another requirement is that your total debts must be below a certain amount. If your debts are too high, you may not qualify for Chapter 13. The debts are separated into two categories: secured debts (like a mortgage or car loan) and unsecured debts (such as credit card bills or medical bills). The total of both types of debts must stay under the limit set by the court. If your debts exceed this limit, you may need to explore other bankruptcy options.
Credit Counseling
Before filing Chapter 13 bankruptcy in Salem, Oregon, you are required to complete a credit counseling course. This course helps you review your finances and explore other options besides bankruptcy. You must take this course from an approved agency before filing your case. Completing the credit counseling is a step that must be done within 180 days before you file. Without this step, your bankruptcy case may be dismissed.
Non-Dischargeable Debts
Not all debts can be included in a Chapter 13 repayment plan. For example, student loans, child support, and alimony cannot be discharged through Chapter 13. You will still need to pay these debts, even if you’re able to reorganize your other debt. However, most other unsecured debts can be part of the plan, allowing you to repay them over time. It’s essential to know which debts are eligible for discharge under Chapter 13.
Previous Bankruptcy Filings
Your history of bankruptcy can affect your eligibility for Chapter 13. If you have received a discharge in a previous Chapter 7 bankruptcy case, you must wait four years before filing again. If you filed for Chapter 13 before and received a discharge, you must wait two years before filing again. This rule helps ensure that people do not misuse the bankruptcy system. Knowing these time limits can help you plan your next steps.
By meeting these basic eligibility requirements, you can proceed with filing Chapter 13 bankruptcy in Oregon and begin the process of reorganizing your debts. It’s a way to regain control of your financial future and work toward becoming debt-free.
What are the Benefits of Filing Chapter 13 Bankruptcy in Salem, OR?
Filing for Chapter 13 bankruptcy offers several benefits for individuals facing financial difficulties. This option allows you to reorganize your finances and make a plan to repay what you owe over time. Here are some of the advantages of filing Chapter 13:
- Debt Repayment Plan: Chapter 13 allows you to create a repayment plan that fits your income and budget. You make monthly payments to a trustee, who then distributes the money to your creditors.
- Protection from Creditors: Filing for Chapter 13 stops creditors from harassing you. The automatic stay prevents them from calling, sending bills, or taking legal action against you.
- Discharge Unsecured Debts: At the end of your repayment plan, any remaining unsecured debts may be wiped away. This means that debts like credit card bills or medical bills can be eliminated, giving you a fresh start.
- Prevent Foreclosure and Repossession: If you are behind on your mortgage or car payments, filing for Chapter 13 can stop foreclosure and repossession. The court will put a hold on these actions, giving you time to catch up on missed payments.
How Our Chapter 13 Bankruptcy Attorney in Oregon Can Help
When financial troubles weigh you down, finding the right legal help can make all the difference. At Northwest Debt Relief Law Firm, our Chapter 13 bankruptcy attorney in Oregon, offers the support and guidance you need throughout the process. We provide Chapter 13 filing services in Salem, OR, to help you organize your debt into a manageable repayment plan.
By working with our bankruptcy law firm, you can create a plan that works for your budget while keeping your property safe. We will help you fill out all necessary forms, submit the petition to the court, and communicate with creditors. We make sure your repayment plan is fair and realistic so you can make progress without falling further into debt. We will work with you every step of the way, helping to relieve the pressure of overwhelming debt.
Don’t let debt control your life. Filing Chapter 13 bankruptcy in Salem, Oregon, could provide you with the relief you need. Contact us today for a free debt solution consultation and take the first step toward a debt-free future.
Determine If You Qualify for Chapter 7 Bankruptcy in Salem
Are you struggling with debt and feeling hopeless? Chapter 7 bankruptcy might be an option for you. It’s a legal process that can help you eliminate most of your debts. However, before beginning the process, you must meet certain eligibility requirements. Our Chapter 7 bankruptcy attorney in Salem, OR can guide you through the process and ensure you meet all necessary criteria.
This article will explain what you need to qualify for Chapter 7 bankruptcy, including income limits and other important factors. By knowing the eligibility criteria and understanding the requirements, you can decide whether Chapter 7 bankruptcy is right for you.
Quick Summary:
- Chapter 7 bankruptcy is a legal option for people facing overwhelming debt, offering a chance to start over by eliminating most unsecured debts. The court reviews your financial situation and may sell certain assets to pay creditors, while exemptions often allow you to keep essentials like your home or car. This process can relieve financial stress and help you move toward a more stable future.
- To qualify for Chapter 7 bankruptcy in Salem, Oregon, you must meet specific income, residency, and previous filings requirements. Passing the means test is essential, as it compares your income to Oregon’s median and determines if your disposable income qualifies. You must also demonstrate that your financial situation prevents you from repaying debts and meet a 90-day residency requirement in the state. Completing credit counseling within 180 days before filing is mandatory, and any prior bankruptcy filings must fall within legal time limits.
- Filing for Chapter 7 bankruptcy in Oregon is a relatively quick process and allows you to discharge unsecured debts like credit card bills and medical expenses. The automatic stay immediately stops creditor actions, such as collection calls and wage garnishments, relieving financial pressure. Additionally, exemptions under Oregon law protect essential property, such as your home and car, ensuring you can retain important assets while resolving your debts.
What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is a legal process that helps people who are struggling with debt. If you find yourself overwhelmed by bills and unable to pay them, Chapter 7 may be a way to get a fresh start. This type of bankruptcy allows you to eliminate most of your unsecured debts, like credit card bills and medical expenses.
Once you file for Chapter 7, a court will review your situation and may sell some of your assets to pay off creditors. However, you may keep essential belongings, such as your home and car, through exemptions. Chapter 7 bankruptcy can give you relief from financial stress and help you rebuild your life.
What are the Eligibility Requirements for Chapter 7 Bankruptcy in Salem, Oregon?
Chapter 7 bankruptcy can help you eliminate most of your unsecured debts, allowing you to start fresh. However, not everyone can qualify for this type of bankruptcy. You must meet specific criteria regarding your income, residency, and previous bankruptcy filings. Below are the eligibility requirements you should know before deciding to file.
Means Test
To qualify for Chapter 7, you must pass the means test. This test compares your income to the median income for a household of your size in Oregon. If your income is below the median, you can qualify. However, if your income is higher, you must provide details of your expenses. If your income is still too high after applying for the test, you may not qualify for Chapter 7.
Even if you do not pass the means test, other options may be available to help with your financial situation. It’s essential to calculate your disposable income accurately to determine your eligibility.
Income and Expenses
After passing the means test, the court will look at your income and expenses. You must prove that your income is insufficient to pay off your debts. If the court believes you can pay some of your debts, they may deny your Chapter 7 application. However, if you have significant debts and cannot pay them off, this can help you qualify. You may also need to provide documentation of your financial situation.
Residency Requirement
To file for Chapter 7 in Oregon, you must have lived in the state for at least 90 days before filing. This is because bankruptcy rules are tied to your current residence. If you’ve recently moved to Oregon, the court will use your previous state’s laws to determine your eligibility. This rule helps make sure that you are filing under the right jurisdiction.
Credit Counseling
Before filing for Chapter 7, you must complete credit counseling with an approved agency. This counseling session must happen within 180 days before filing your case. The goal is to ensure you understand your options for debt relief and that bankruptcy is the best solution. You must provide proof of completing this counseling as part of your filing.
Previous Bankruptcy Filings
If you have filed for bankruptcy in the past, it can impact your eligibility. There are time limits on how often you can file for Chapter 7 bankruptcy. If you filed Chapter 7 before, you must wait eight years before filing again. If you previously filed Chapter 13, you must wait six years. The court will check your history to ensure you meet the required time limits.
What are the Benefits of Filing Chapter 7 Bankruptcy?
If you feel overwhelmed by bills and collection calls, Chapter 7 might be the solution you need. Below are some key benefits of filing for Chapter 7 bankruptcy that can help you regain control of your finances:
Debt Discharge
One of the biggest benefits of Chapter 7 bankruptcy is the ability to discharge or wipe out most of your unsecured debts. This includes debts like credit card bills, medical expenses, and personal loans. Once your debts are discharged, you no longer have to pay them, which can relieve a lot of financial stress. You can start fresh without the burden of these debts holding you back.
Automatic Stay
When you file for Chapter 7 bankruptcy, an automatic stay is effective immediately. This stay stops most collection actions against you, including lawsuits and wage garnishments. Creditors cannot contact you or try to collect debts while your bankruptcy case is open. This gives you time to breathe and plan your next steps without the pressure from creditors.
Quick Process
Chapter 7 bankruptcy is usually quicker than other types of bankruptcy, like Chapter 13. This means you can quickly eliminate your debts and move on. The speed of this process can bring immediate relief from creditor harassment and collection actions. You will not have to wait long to enjoy the benefits of a debt-free life.
Keep Essential Property
Many people worry about losing their belongings when they file for bankruptcy, but Chapter 7 allows for exemptions that let you keep essential property. In Oregon, certain assets like your home, car, and personal belongings may be protected under state law. This means that filing for Chapter 7 does not mean losing everything you own. You can often keep these items as long as they fall within the exemption limits.
Contact our Chapter 7 Bankruptcy Attorney in Salem, OR!
Filing for Chapter 7 bankruptcy can be life-changing for anyone struggling with debt. It can give you the chance to rebuild your finances and leave behind unmanageable debts. This can also be an overwhelming process for you. Therefore, seeking help or advice from professionals such as our bankruptcy eligibility lawyer in Salem, Oregon can be beneficial. .
Our Chapter 7 bankruptcy attorneys in Northwest Debt Relief Law Firm can help you understand how Chapter 7 works and walk you through the eligibility for bankruptcy in Salem requirements under the law. We can help you protect your assets and get relief from financial stress. We can help you avoid common mistakes and ensure that your case is handled correctly.
Our lawyers at Northwest Debt Relief Law are here to provide the support you need. Let us help you find the right path to financial relief and move forward with confidece. Take the first step toward financial freedom. Contact us today for a free debt solution consultation.
SBA EIDL Fraud & How It Is DiscoveredEvery day, and often multiple times a day, we read stories about people or businesses being indicted for PPP or SBA EIDL loan fraud.I have always wondered how these cases are discovered.First, the SBA Inspector General has an online portal to submit loan fraud reports. The portal can be found at https://www.sba.gov/about-sba/oversight-advocacy/office-inspector-general/office-inspector-general-hotline#submit-a-complaint.Second, the FBI has special agents and field offices throughout the country investigating SBA EIDL loan fraud andThird, The New York Times recently published an article titled "They Investigated Pandemic Fraud, Then Earned Thousands," available at https://www.nytimes.com/2024/11/23/us/politics/pandemic-fraud-lawsuits.html. The article explains that under the False Claims Act, private citizens can file lawsuits on behalf of the federal government against those who may have defrauded the United States. If the government recovers funds, these citizens can typically earn between 15 and 30 percent of that amount. These lawsuits are known as "qui tam," or whistle-blower cases, and citizens have recovered hundreds of thousands of dollars by bringing these cases.This story brings to mind the old adage that one person's misfortune is another person's fortune!Jim Shenwick, Esq917-363-3391[email protected]Please click the link to schedule a telephone call with mehttps://calendly.com/james-shenwick/15minWe help individuals and businesses with too much debt!
Take Control of Your Debts and Finances Through Chapter 13 Bankruptcy
Unexpected financial troubles can leave you feeling stuck, but Chapter 13 bankruptcy offers a way to get back on track. Chapter 13 bankruptcy can be a powerful tool for reorganizing your debts and getting a fresh start. Our Chapter 13 bankruptcy lawyer in Salem, OR, can help you follow the legal process and ensure your case is filed correctly under federal bankruptcy laws.
Filing Chapter 13 in Salem, OR, can help you protect your assets while addressing your debts. This process lets you reset your finances and move toward a more secure future. One of the key components of this process is creating a Chapter 13 repayment plan in Salem, Oregon, which outlines how you will pay back your creditors over three to five years. This article will explain the benefits of Chapter 13 bankruptcy and how it can help you regain control of your finances.
Quick Summary:
- Chapter 13 bankruptcy offers a way to manage your debts while keeping your property. It allows you to create a repayment plan based on your income, enabling you to make affordable monthly payments over three to five years. Once you file, creditors must stop collection efforts. This process, governed by federal laws under the Bankruptcy Code, provides legal protection and helps you work toward regaining financial stability.
- To qualify for Chapter 13 bankruptcy, you must meet specific rules set by federal law. You need a reliable income source, such as a job or Social Security, to support your repayment plan. Your debts must fall within certain limits, and you must be current on tax filings. Completing a credit counseling course must ensure you have explored all options before filing. Additionally, you must wait a set period if you recently filed another bankruptcy type, as repeated filings are not allowed within short time frames.
- Filing for Chapter 13 bankruptcy in Salem, OR, offers several benefits for those facing debt challenges. This option allows you to create a manageable repayment plan based on your budget, typically lasting three to five years. It can stop foreclosure, protect your home, and safeguard valuable assets like your car and personal belongings. The automatic stay also halts creditor harassment, wage garnishments, and lawsuits, giving you peace of mind. Additionally, unsecured debts such as credit card bills and medical expenses may be reduced or discharged, providing a path toward a fresh financial start.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a way to manage your debts while keeping your property. Instead of selling your assets, you follow a repayment plan to pay back your debts over three to five years. This plan is based on your income and allows you to pay what you can afford monthly.
Once your case is filed, creditors must stop collection efforts, including calls and wage garnishments. Chapter 13 is guided by federal laws under the Bankruptcy Code (11 U.S.C. § 1301 et seq.), giving you legal protection as you work toward financial recovery.
Who Qualifies for Chapter 13 Bankruptcy?
If you are struggling with debt and want to protect your property, Chapter 13 bankruptcy might be an option. However, you need to meet specific eligibility rules and follow certain requirements set by federal bankruptcy law. Here are some of the factors that determine eligibility:
You Must Have a Regular Income
To qualify for Chapter 13 bankruptcy, you need a regular income. When the court refers to “regular income,” they seek reliable and consistent payments. This means that your income should be predictable and sufficient to meet the monthly obligations of your repayment plan. Regular income includes wages from employment, income from a business, alimony or child support payments, pension or retirement benefits, Social Security payments, or rental income.
Your income level is verified through a process called the means test. This test compares your income to the median income for a household of your size in your state. Along with the means test, you must provide proof of your income through documents like pay stubs, tax returns, and bank statements. The court uses this information to ensure your income is stable enough to support a repayment plan for your financial situation.
Your Debts Must Be Within Certain Limits
Your debts must fall within specific limits to qualify for Chapter 13 bankruptcy. Secured debts, such as mortgages and car loans, cannot exceed $1,395,875. Unsecured debts, like credit card bills or medical expenses, cannot exceed $465,275. If your debts are higher than the allowed amounts, you may be unable to file for Chapter 13. In such cases, you may need to consider filing for a different type of bankruptcy.
You Must Be Current on Your Tax Returns
Before you can file for Chapter 13 bankruptcy, you must be current on your tax filings. The court will require that you have filed your tax returns for the last four years before filing for bankruptcy. If you have not filed your taxes in this period, you must catch up before proceeding with your Chapter 13 case. Failing to file your taxes on time can delay or prevent you from qualifying for Chapter 13.
You Must Complete Credit Counseling
Before filing for Chapter 13 bankruptcy, you must complete a credit counseling course from an approved agency. This is a required step by the court and must be done within 180 days before you file. This counseling aims to help you learn about your options and whether bankruptcy is the best choice. After completing the counseling, you will receive a certificate you must submit with your bankruptcy petition. The counseling helps ensure you make an informed decision about your financial future.
Debtor Education Course Requirement After Filing
After filing for Chapter 13 bankruptcy, completing a debtor education course is another critical step before you can receive a discharge of your debts. The debtor education course must be taken from an approved provider to help you learn how to manage your finances effectively and avoid future financial struggles. It typically covers topics such as budgeting, saving, managing credit, and how to avoid debt accumulation in the future.
Upon completing the debtor education course, you will receive a certificate of completion. You must file this certificate with the court to proceed with your bankruptcy case and qualify for a discharge of the remaining debts at the end of the repayment period.
You Must Not Have Recently Filed Certain Bankruptcies
If you have filed for bankruptcy in the past, there are rules about how soon you can file again. If you have filed for Chapter 13 bankruptcy before, you must wait at least two years before filing again. Similarly, if you have filed for Chapter 7 bankruptcy, you must wait at least four years. These waiting periods help prevent people from repeatedly filing for bankruptcy without taking steps to manage their finances. If you are still waiting, you may need to explore other options before filing for Chapter 13.
What are the Benefits of Filing Chapter 13 Bankruptcy in Salem, Oregon?
Filing Chapter 13 in Salem, OR, can benefit individuals struggling with debt. This type of bankruptcy allows you to keep your property while creating a plan to repay your debts over three to five years. Below are some of the advantages of filing for Chapter 13 bankruptcy:
Create a Manageable Payment Plan
Chapter 13 bankruptcy offers a structured repayment plan that makes it easier for you to manage your debts. When you file in Salem, Oregon, you will propose a Chapter 13 repayment plan in Salem, Oregon based on your income and expenses, which the court must approve. This plan typically lasts three to five years and allows you to make monthly payments that fit your budget. By breaking down what you owe into manageable payments, you can work towards becoming debt-free without feeling overwhelmed. A clear repayment schedule helps reduce financial stress and provides a path forward.
Stop Foreclosure and Keep Your Home
You can save your home from foreclosure by filing for Chapter 13 bankruptcy. The automatic stay stops foreclosure proceedings and gives you time to catch up on missed mortgage payments. Your repayment plan can include the overdue payments, allowing you to spread them out over the plan period. You can keep your home as long as you stay current on future payments. This allows you to protect one of your most valuable assets while dealing with your debts.
Keep Your Assets
Unlike Chapter 7 bankruptcy, which may require selling some of your property, Chapter 13 allows you to keep your valuable assets. You can protect your home, car, and personal belongings while working through your debts. This is especially helpful if you have significant equity in these assets you do not want to lose. The repayment plan is designed to help you pay off debts while retaining ownership of what matters most to you.
Stop Creditor Harassment and Wage Garnishments
Another benefit of filing for Chapter 13 bankruptcy is that it stops creditor harassment immediately upon filing. You will no longer receive constant calls or letters from debt collectors demanding payment. The automatic stay protects you from lawsuits and wage garnishments, giving you space to breathe while working through your debts. This relief from stress allows you to focus on creating a solid repayment plan instead of worrying about aggressive collection efforts. A calmer environment can help improve your overall well-being during this challenging time.
Reduce or Eliminate Unsecured Debts
Unsecured debts, like credit card balances and medical bills, can be reduced or even discharged with Chapter 13 bankruptcy. Your repayment plan prioritizes secured debts like a mortgage or car loan, leaving a smaller portion for unsecured debts. At the end of the plan period, the remaining balances on unsecured debts may be forgiven. This can significantly lighten your financial burden and make it easier to rebuild. This benefit gives you a fresh start while focusing on debts that matter most.
The Role of our Chapter 13 Bankruptcy Lawyer in Salem, OR
Feeling overwhelmed by debt can be stressful, but there is hope. Filing for Chapter 13 bankruptcy can be a life-changing decision that opens the door to a fresh start. At Northwest Debt Relief Law Firm, our Chapter 13 bankruptcy lawyer in Salem, OR will guide you through each step of the process and ensure your rights are protected.
Working with our bankruptcy law firm allows you to develop a manageable repayment plan based on your income and expenses. We handle all the paperwork, communicate with creditors, and represent you in court so you can focus on rebuilding your life. With our guidance, you’ll have a clear plan to move forward and regain control over your finances.
Don’t let debt weigh you down. Contact us today for a free debt solution consultation, and take the first step toward a debt-free future.
A Bloomberg article https://news.bloomberglaw.com/bankruptcy-law/senate-proposal-would-grow-...
eligibility is reporting that a new Senate proposal aims to increase the debt limits for Subchapter V bankruptcy eligibility for
small businesses. This proposal would restore the higher debt limit of $7.5 million for Subchapter V filings, up from the current
limit of about $3 million. The expansion would allow more businesses to take advantage of Subchapter V's benefits, which
include a more streamlined and cost-effective restructuring process compared to traditional Chapter 11 bankruptcies.
The potential revival of the higher debt limit comes after a significant drop in small business bankruptcy filings following the
expiration of the previous $7.5 million threshold.
Subchapter V, introduced in 2019, initially applied to businesses with less than $2.7 million in debt but was expanded to $7.5
million in 2020 as part of COVID-era business relief. This expansion was extended in 2022 but eventually expired, reverting
the eligibility requirement to about $3 million.
We are monitoring these developments and will continue to report on updates to Subchapter V.
We help individuals and businesses who have too much debt!Jim Shenwick, Esq 917 363 3391 [email protected]
Please click the link to schedule a telephone call with me.
https://calendly.com/james-shenwick/15min
We help individuals & businesses with too much debt!
What You Need to Know About Business Bankruptcy and Personal Credit
When a business faces serious financial problems, many business owners wonder, “Does filing business bankruptcy affect your personal credit?” If you have signed a personal guarantee for a business, it can. This can lead to major issues with your personal credit if the business files for bankruptcy and cannot cover the debts.
If a creditor cannot get the money from the business, they may turn to you to cover the debt. If you cannot pay, the unpaid debt may appear on your credit report, lowering your score and possibly leading to collection efforts or lawsuits. Our Portland bankruptcy attorney can help you understand your legal rights and how bankruptcy can impact your personal finances.
Quick Summary:
- Business bankruptcy helps companies manage debts when they can’t pay their bills. Chapter 7 allows businesses to close and sell assets to pay creditors. Chapter 11 lets companies stay open and reorganize their debts. Sole proprietors can use Chapter 13 to keep assets and repay debts over time.
- A personal guarantee in business bankruptcy is a promise made by an individual to take on responsibility for the business’s debts if the business cannot pay. By signing a personal guarantee, the individual agrees to repay the loan or debt if the company defaults. Lenders often require personal guarantees for added security, knowing they can recover money from the business owner if needed. Personal guarantees are typically used for business loans, leases, or credit lines.
- Filing for business bankruptcy can impact the owner’s personal credit. Personal guarantees make the owner responsible for business debts. If the business can’t pay, creditors may go after personal assets. This can lower the owner’s credit score and cause financial hardship. Bankruptcy stays on credit reports for years, making it harder to get new loans.
- Filing for business bankruptcy can significantly affect personal credit. The type of bankruptcy, terms of personal guarantees, creditor strength, value of business assets, and state and federal laws influence this impact. To protect personal credit, avoid personal guarantees, separate business and personal finances, and negotiate with creditors.
What is Business Bankruptcy?
Business bankruptcy is a legal process that helps companies deal with their debts when they can no longer pay their bills. This process offers a way for businesses to either close down or reorganize their financial situation. Understanding business bankruptcy can help owners make better decisions during tough times.
There are several types of business bankruptcy:
- Chapter 7 Bankruptcy: Chapter 7 bankruptcy allows businesses to close down and liquidate their assets. This means that the business sells its property to pay off creditors. After the process, most of the business’s debts are wiped away, allowing the owner to start over. However, this option is usually for companies with no way to continue operations.
- Chapter 11 Bankruptcy: Chapter 11 bankruptcy is more common for businesses that wish to stay open. This option allows companies to restructure their debts while continuing operations. Under Chapter 11, a business creates a plan to pay back creditors over time. The court must approve this plan to help businesses regain financial stability.
- Chapter 13 Bankruptcy: While Chapter 13 is often associated with personal bankruptcy, some sole proprietors can use it. This option allows individuals to reorganize their debts and make a repayment plan that lasts three to five years. It works well for small businesses that want to keep their assets while managing debts.
What is a Personal Guarantee in Business Bankruptcy?
A personal guarantee in bankruptcy refers to a promise made by an individual to take responsibility for a business’s debts. When someone signs a personal guarantee, they agree to repay a loan if the business cannot. This promise can become very important when a business files for bankruptcy. Lenders and creditors often require personal guarantees because it gives them more security. They know that if the business cannot pay, they can turn to the owner to get their money back.
Personal guarantees are common for business loans, leases, or credit lines. For example, when a business takes out a loan, the bank might ask the owner to guarantee it personally. If the business cannot pay the loan, the bank can hold the owner personally responsible. This makes personal guarantees a big responsibility for business owners because they are putting their personal finances at risk.
What Happens to My Personal Credit in a Business Bankruptcy with Personal Guarantees?
Filing for business bankruptcy can be a tough choice for many business owners. This process helps a business deal with its debts and start over. However, it can also have a big effect on the owner’s personal credit. In some cases, personal credit can be affected if the owner has personal guarantees or if business and personal finances are mixed. Here’s what you need to know:
- Personal Responsibility for Business Debt: When owners sign personal guarantees for business loans, they take on personal responsibility for those debts. If the business goes bankrupt and cannot pay, creditors may pursue the owner’s personal assets. This can lead to significant financial trouble and damage the owner’s personal credit score.
- Decrease in Credit Score: Bankruptcy can lead to a drop in the owner’s credit score. The credit score reflects how likely someone is to repay debts. A bankruptcy filing signals to lenders that the individual might be a risk. This can result in a lower credit score, making it harder to get loans or credit cards in the future.
- Negative Information on Credit Reports: Bankruptcy stays on a personal credit report for several years. For example, Chapter 7 bankruptcy can remain for up to ten years, while Chapter 11 stays for about seven years. These negative marks can affect creditworthiness.
- Challenges in Getting New Credit: Getting new credit can be difficult after filing for bankruptcy. Many lenders may refuse to approve applications. Those who do may charge higher interest rates due to the perceived risk. This situation can limit access to funds for personal or business needs.
- Creditor Actions Against Personal Assets: When personal guarantees are in place, creditors may take action against personal assets. If the business fails to pay its debts, creditors might garnish wages or place liens on property. These actions can further harm personal credit and add stress to the owner’s finances.
What are the Factors Affecting the Impact of Business Bankruptcy on Personal Credit?
Filing for business bankruptcy can significantly affect personal credit, especially for business owners. When a business goes bankrupt, personal credit scores may change. Understanding the factors that affect this impact can help individuals prepare for the consequences.
- Type of Bankruptcy Filed: The type of bankruptcy filed can affect personal credit differently. Chapter 11 may have less impact on personal credit, depending on the success of the business after filing. On the other hand, Chapter 7 bankruptcy can lead to a more significant negative impact on personal credit, especially if personal guarantees are involved.
- Terms of the Personal Guarantee: Personal guarantees specify what happens if a business cannot pay its debts. The terms may outline what creditors can pursue. If a personal guarantee is broad and covers many types of debt, personal credit could face a bigger impact during bankruptcy.
- Strength of the Creditor’s Case: The strength of a creditor’s case can determine how much impact bankruptcy has on personal credit. If creditors prove that a business owner is personally liable for debts through personal guarantees, personal credit may suffer more. A strong case may lead to collection efforts on personal assets, which can further damage credit scores.
- Value of Business Assets: The value of the business’s assets plays a role in how bankruptcy affects personal credit. If the business has valuable assets, creditors may focus on those first. If the assets do not cover the debts, personal liability could increase, negatively affecting credit scores.
- State and Federal Laws: Laws regarding bankruptcy and personal liability vary by state and federal regulations. These laws can influence how personal credit is affected. Some states may offer better protection for personal credit than others. Understanding these laws can help business owners navigate bankruptcy more effectively.
What are the Ways on How to Protect Personal Credit?
Protecting personal credit is essential for business owners, especially when facing financial challenges. A few strategies can help keep personal finances safe from business debts. These options can help business owners make informed choices:
- Avoid Personal Guarantees: If possible, avoid signing personal guarantees on your business loans. This will help limit your personal liability.
- Separate Your Business From Your Personal Finances: Forming a limited liability company (LLC) or corporation can help protect your personal assets from business debts.
- Negotiate with Creditors: If you’re struggling to pay your business debts, you may be able to negotiate a settlement or payment plan with your creditors. This can help to protect your personal credit.
How Our Portland Bankruptcy Attorney Can Help You Navigate Business Bankruptcy and Personal Credit
Filing for business bankruptcy can be a stressful and confusing time. Many business owners wonder, “Does filing business bankruptcy affect your personal credit?” The answer is yes, and the impact can be significant. When personal guarantees are involved, the stress can increase as you worry about how this decision will affect your personal credit. That’s where our Portland bankruptcy attorney can help.
At Northwest Debt Relief Law Firm, we can explain how filing for business bankruptcy can impact your personal credit and what steps you can take to protect yourself. Our Oregon bankruptcy law firm can provide personalized advice based on your specific situation. We will review your personal guarantees and help you explore your options. This includes strategies to minimize your personal liability and protect your credit. With our guidance, you can make informed decisions about how to proceed.
Don’t wait to get the support you need. Contact us now for a free debt solution consultation, and let us help you make the best decision for your business and personal finances. We are here to help you every step of the way.
USAToday has an article on why so many businesses are closing or filing for Bankruptcy. At Shenwick & Associates we seeing an increase in small businesses either closing or filing for Bankruptcy. https://www.usatoday.com/story/money/2024/09/29/small-businesses-inflation-struggles/75405075007/?gnt-cfr=1&gca-cat=p
Jim Shenwick, Esq 917 363 3391 [email protected] Please click the link to schedule a telephone call with me.https://calendly.com/james-shenwick/15minWe help individuals & businesses with too much debt!
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