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Worried about the flurry of spending in December, and motivated by the carpe diem attitude of New Year’s, many Californians feel January is the time to think about getting a fresh start by filing for bankruptcy. With 2017 just around the corner, our Folsom Chapter 7 bankruptcy lawyers examine two important reasons to postpone filing for bankruptcy – and, on the other side of the coin, three scenarios where it might make financial sense to declare Chapter 7 or Chapter 13 bankruptcy this January.
When Should You Wait to File for Bankruptcy?
In a simpler world, a single day, week, or month of the year would be designated as the “best time” or “worst time” to file for bankruptcy. However, the world we live in is anything but simple, and neither is the matter of filing for bankruptcy. While January might be an ideal time for one individual to declare bankruptcy, it could be financially unwise for another, and vice versa.
Regardless of whether (s)he intends to file for Chapter 7 or Chapter 13 bankruptcy, every single debtor in California has his or her own unique set of debt considerations, financial goals, and life circumstances, which is just part of the reason it is so crucial to assess your situation in depth with an experienced bankruptcy attorney before you decide to file – or, for that matter, before you decide you should delay filing.
There is no replacement for a detailed consultation with a California Chapter 7 bankruptcy attorney, and this article is not intended to serve as legal advice. However, with that caveat in mind, the information presented here can help give you a clearer idea of when to hit the brakes – or step on the gas – if you’re thinking about declaring bankruptcy.
Do either of the following scenarios describe you? If so, you may want to wait to file.
- You just lost a high-paying job, but you would like to file for Chapter 7 bankruptcy. There are two main types of bankruptcy for addressing consumer debt: Chapter 7 and Chapter 13, the latter of which is geared toward debtors who possess greater resources. Your resources are evaluated by a “means test,” which dates back six months. The financial impact of a recent job loss will not be accurately reflected, so it may make sense to wait until additional time has passed.
- You expect a large expense in the future. When you file for bankruptcy, only your existing debts are, depending on the type of debt, eligible for discharge. If you know that you will incur a major expense in the future – for example, if you know that you will have large medical bills later in the year – it makes sense to wait until afterward to file.
3 Reasons to Consider Filing for Chapter 7 or 13 Bankruptcy in January 2017
Now that you’ve seen some of the reasons to delay a bankruptcy filing, let’s switch gears and examine some scenarios in which it makes sense to file for bankruptcy in January – or at least, in your near future.
- You’re going to move to another state. Contrary to the common myth that “you lose everything” when you file for bankruptcy, you are actually permitted to protect a portion of your property by using exemptions. There are two sets of exemptions: state exemptions, which differ from state to state, and federal exemptions, which are consistent throughout the country. Some states, like California, require debtors to select the state exemptions, while others permit a choice. If you know that you are moving to a state where the exemptions are less favorable, it may be prudent to declare bankruptcy soon, so that you can get the benefit of the more generous exemptions available where you currently live.
- You anticipate a bonus or inheritance. You must prepare a comprehensive list of your assets and property when you file for bankruptcy, and if a resource is not protected by an exemption, the trustee appointed to your case may apply it toward repaying your debts. You may, therefore, wish to consider filing before your resources increase.
- You need immediate protection from foreclosure or repossession. Bankruptcy brings into rapid effect a court injunction called “the automatic stay,” which, generally speaking, temporarily protects you from collection actions. The automatic stay can stop or delay foreclosure or repossession, which will, at the very least, give you time to create a plan for the future.
California Chapter 13 Bankruptcy Lawyers Serving Sacramento, Folsom, and Roseville
The California Chapter 13 bankruptcy attorneys of The Bankruptcy Group have extensive experience handling bankruptcy cases on behalf of Californians from all financial backgrounds and walks of life. Regardless of what your reasons for considering bankruptcy may be, we are here to make the process simpler by advising you on your financial options and helping you get back to a path of solvency.
We know how stressful and intimidating simply hearing the word “bankruptcy” can be, but rest assured that when you are represented by an attorney from The Bankruptcy Group, we will do all that we can to ease your fears while also helping you create a plan to manage your debts and achieve your financial goals. To learn more about whether filing for bankruptcy could be right for you, call our law offices at (800) 920-5351 for a free and confidential legal consultation.
The post Is January the Best Time to File for Bankruptcy? appeared first on BK Law.
At the close of every calendar year, I try and reflect about the year past from a bankruptcy standpoint. What was most rewarding about being a chapter 13 bankruptcy attorney? What would’ve made the practice of law even more rewarding? What types of rulings or policies would I have liked to have seen go in+ Read More
The post A Chicago Bankruptcy Attorney’s Christmas Wish List To Chapter 13 Trustees appeared first on David M. Siegel.
Bankruptcy Code Section 523(a)(6): A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt . . . for willful and malicious injury by the debtor to another entity or to the property of another entity.
A federal jury has awarded $28.1 million to six plaintiffs (the “Beatrice 6”) for a reckless investigation and manufacturing false evidence conducted by the Gage County Sheriff’s department. The plaintiffs spent 20 years in prison for the 1985 rape and murder of Helen Wilson, but DNA testing conducted in 2008 revealed that the murder was actually committed by another individual, Bruce Allen Smith.
Following their release from prison, the plaintiffs brought suit in Nebraska federal court for the Sheriff Department’s building a case on coerced false confessions.
As a result of this judgment, Gage County has recently signed contracts with law firms to possibly file a Chapter 9 bankruptcy case. Insurers for the county have denied coverage.
The interesting and somewhat unusual aspect of this potential bankruptcy case is that Gage County was not in any financial distress prior to the entry of this judgment. The bankruptcy is contemplated for the sole reason of denying payment to victims of the County’s intentional wrongdoing.
Generally, damages sustained due to “willful and malicious” injuries are not dischargeable under bankruptcy code Section 523(a)(6), but that provision of the law does not apply to Chapter 9 cases involving municipalities and public subdivisions.
So, Gage County may file bankruptcy for the sole purpose of denying payment for the intentional, willful and malicious damages inflicted on the Beatrice 6.
Although the judgment may be subject to discharge, there is certain to be objections to any plan of reorganization filed that proposes to pay less than the full court judgment. The county still must prove it’s reorganization plan is filed in good faith and that it cannot propose to pay the entire judgment. In the Detroit, Michigan bankruptcy case it was apparent that the city could not tax itself into solvency, but what about Gage County? Could the county structure full payment of the judgment if the county raised real estate taxes? By what percentage would the levy have to increase to pay the judgment?
Gage County has land valued at $3 billion in 2015 according to the Nebraska Department of Revenue. The county collected $9 million in real estate taxes last year on a levy rate of 29.7 cents per $100 of land value. Paying the entire $28.1 million judgment in one year would be impossible, but what about paying off the debt over 10 to 20 years?
If paying off the debt in full over 10 to 20 years is possible with only a modest increase of the tax levy, why would a bankruptcy court enable taxpayers of Gage County to avoid this obligation in a Chapter 9 plan regardless of whether the debt is subject to discharge? How would that type of bankruptcy plan meet the burden of proposing a plan in “good faith?”
It should be an interesting year in Nebraska bankruptcy court for 2017.
Image courtesy of Flickr and Dave Nakayama
Bankruptcy Code Section 523(a)(6): A discharge under section 727, 1141, 1228(a), 1228(b), or 1328(b) of this title does not discharge an individual debtor from any debt . . . for willful and malicious injury by the debtor to another entity or to the property of another entity.
A federal jury has awarded $28.1 million to six plaintiffs (the “Beatrice 6”) for a reckless investigation and manufacturing false evidence conducted by the Gage County Sheriff’s department. The plaintiffs spent 20 years in prison for the 1985 rape and murder of Helen Wilson, but DNA testing conducted in 2008 revealed that the murder was actually committed by another individual, Bruce Allen Smith.
Following their release from prison, the plaintiffs brought suit in Nebraska federal court for the Sheriff Department’s building a case on coerced false confessions.
As a result of this judgment, Gage County has recently signed contracts with law firms to possibly file a Chapter 9 bankruptcy case. Insurers for the county have denied coverage.
The interesting and somewhat unusual aspect of this potential bankruptcy case is that Gage County was not in any financial distress prior to the entry of this judgment. The bankruptcy is contemplated for the sole reason of denying payment to victims of the County’s intentional wrongdoing.
Generally, damages sustained due to “willful and malicious” injuries are not dischargeable under bankruptcy code Section 523(a)(6), but that provision of the law does not apply to Chapter 9 cases involving municipalities and public subdivisions.
So, Gage County may file bankruptcy for the sole purpose of denying payment for the intentional, willful and malicious damages inflicted on the Beatrice 6.
Although the judgment may be subject to discharge, there is certain to be objections to any plan of reorganization filed that proposes to pay less than the full court judgment. The county still must prove it’s reorganization plan is filed in good faith and that it cannot propose to pay the entire judgment. In the Detroit, Michigan bankruptcy case it was apparent that the city could not tax itself into solvency, but what about Gage County? Could the county structure full payment of the judgment if the county raised real estate taxes? By what percentage would the levy have to increase to pay the judgment?
Gage County has land valued at $3 billion in 2015 according to the Nebraska Department of Revenue. The county collected $9 million in real estate taxes last year on a levy rate of 29.7 cents per $100 of land value. Paying the entire $28.1 million judgment in one year would be impossible, but what about paying off the debt over 10 to 20 years?
If paying off the debt in full over 10 to 20 years is possible with only a modest increase of the tax levy, why would a bankruptcy court enable taxpayers of Gage County to avoid this obligation in a Chapter 9 plan regardless of whether the debt is subject to discharge? How would that type of bankruptcy plan meet the burden of proposing a plan in “good faith?”
It should be an interesting year in Nebraska bankruptcy court for 2017.
Image courtesy of Flickr and Dave Nakayama
Can I Cancel the Homeowners Insurance—I’m Moving Out Are you giving up your house as part of your bankruptcy? If you are, can you cancel the homeowners insurance? I say, No. You homeowners insurance does two big things. First, it would pay to rebuild your house after a fire. If you’re giving the house back […]The post Can I Cancel My Homeowner Insurance—I’m Moving Out by Robert Weed appeared first on Robert Weed.
A Better Year Awaits As the year comes to a close, people look to the upcoming year with optimism. What can make next year better than the current year? For some this might mean a better relationship, a better job, a healthier lifestyle, and for some a financial fresh start. For those that have struggled+ Read More
The post Looking Ahead To Next Year With Optimism appeared first on David M. Siegel.
Many bankruptcy cases involve adversary proceedings in which creditors seek to have certain debts deemed nondischargeable. The United States District Court for the Eastern District of Michigan (the “District Court”) recently considered, on appeal, whether the Bankruptcy Court properly held that a debt owed by a debtor (the “Debtor”) to the State of Michigan Unemployment Insurance Agency (the “Agency”) is dischargeable in a Chapter 13 case.1 Read More ›
Tags: Chapter 13, Eastern District of Michigan
Many bankruptcy cases involve adversary proceedings in which creditors seek to have certain debts deemed nondischargeable. The United States District Court for the Eastern District of Michigan (the “District Court”) recently considered, on appeal, whether the Bankruptcy Court properly held that a debt owed by a debtor (the “Debtor”) to the State of Michigan Unemployment Insurance Agency (the “Agency”) is dischargeable in a Chapter 13 case.1 Read More ›
Tags: Chapter 13, Eastern District of Michigan
Introduction Of Debtor This is the bankruptcy case study for Ms. R., who resides in Berwyn, Illinois. She is here to seek bankruptcy protection and to eliminate the struggle that she has been in for some time regarding debt. To determine whether or not she can file and get the relief needed, we need to+ Read More
The post Bankruptcy Case Study appeared first on David M. Siegel.
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The original post is titled Mark M , and it came from Portland Bankruptcy Attorney | Northwest Debt Relief .
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