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2 weeks 5 days ago

Is it Better to File Bankruptcy Chapter 7 or Chapter 13?
It is essential to keep in mind that different types of bankruptcy are suited for different filers, depending on their resources, obligations, and short- and long-term goals. Seeking legal advice early on is advisable as you look closely into your financial problems and work towards making a decision that will rebuild your financial future.

A successful bankruptcy filing under Chapter 7 can wipe out different types of debt. This means that a debtor will no longer need to repay debts that they owe from creditors. Alternatively, a Chapter 13 bankruptcy declaration can help you pay back what you owe to lenders while keeping your assets.  If you plan to file for bankruptcy, seek legal aid right away.

A competent and compassionate Portland OR bankruptcy attorney can explain the pros and cons of your legal options and explain how you can pay off your debts. Our legal team at Northwest Debt Relief Law Firm can help you through the entire bankruptcy process.
Chapter 7 and Chapter 13 bankruptcies can be quite confusing. What this article will focus on are these two common bankruptcy types. It is divided into the following sections:

  • Overview of How to File a Petition for Bankruptcy
  • Looking at Filing for Bankruptcy under Chapter 7
  • Looking at Chapter 13 Bankruptcy Proceedings
  • Why Individuals Who are Struggling Financially Consider Bankruptcy
  • The Need for Legal Services of a Reliable Local Attorney

 
Overview of How to File a Petition for Bankruptcy
Each bankruptcy case is unique. In general, however, below are some of the steps that you must take to have a successful bankruptcy proceeding:
Undergo credit counseling
Counseling with a certified nonprofit credit counseling provider must be accomplished before declaring bankruptcy. This is also a good chance to take a comprehensive look at your financial situation, debts, and immediate plans.
 
Work with the bankruptcy trustee
Bankruptcy trustees evaluate the case, determine eligibility, and confirm whether or not a filer is qualified to file bankruptcy under a specific Chapter. The bankruptcy trustee will also arrange the Meeting of Creditors and manage the transactions between the parties involved.
 
Liquidate non-exempt assets or submit a payment plan
In a Chapter 7 case, the assigned trustee in bankruptcy filings is in charge of liquidating assets and distributing funds accordingly. That is, unless it is a ‘no asset’ case. Proceeds from the liquidation are to be used to settle certain debts.
On the other hand, in a Chapter 13 petition in bankruptcy, the filer must submit a debt repayment plan that will run for three to five years. This must be approved by the bankruptcy court, and it must be proven that the filer has the means to make the monthly payments.
 
Have certain types of debts settled
A debt is considered unsecured if there is no collateral involved. Conversely, a secured debt<span style=”font-weight: 400;”> involves a property, such as a house or a car, as collateral. Under relevant bankruptcy laws, creditors can repossess property and assets to settle secured debts. To avoid foreclosure or repossession, one must allocate enough funds to repay owed debts to particular lenders. 
 
Complete the required financial management course
Completing a financial education course from a certified credit counseling organization is necessary before obtaining a bankruptcy discharge.
 
Obtain a bankruptcy discharge
If applicable, the court order for discharged debts is usually given out around three to six months after filing bankruptcy. Here, all qualifying debts are forgiven or wiped out.
 
Looking at Filing for Bankruptcy under Chapter 7
bankruptcy chapter 7 vs 13
A liquidation bankruptcy petition is especially useful in eliminating unsecured debt. Under the bankruptcy code, unsecured debts generally pertain to debts without any collateral. These may include credit card bills, medical bills, and personal debts. However, certain types of debt do not involve collateral but are considered non-dischargeable. Typical examples include particular tax debt, criminal fines and penalties, child support, alimony, and student loan debt.
Before you can file bankruptcy Chapter 7, you must meet some qualifications. These include:

  • Passing the bankruptcy means test<span style=”font-weight: 400;”>, which takes into account monthly income and living expenses, among other things
  • Not having a recently filed Chapter 7 or Chapter 13 petition in bankruptcy
  • not having filed a previous bankruptcy petition that has been denied due to non-compliance with a bankruptcy court order or failure to appear in court

Filers must keep in mind that failure to provide all the required paperwork and supporting documents may result in the early dismissal of a bankruptcy case. Additionally, court forms and documentation related to one’s debts, personal property, and finances must be complete and comply with relevant bankruptcy rules.

Depending on the actual circumstances, the best option to deal with overwhelming unsecured and secured debts is to file for bankruptcy. A seasoned Portland, Or bankruptcy lawyer can explain these in more detail, together with other advantages and disadvantages of a bankruptcy declaration.
 
Looking at Chapter 13 Bankruptcy Proceedings
A Chapter 13, or what is referred to as a wage earner bankruptcy, is generally helpful if you are a high-income earner who wants to reorganize your debts. Bankrupt individuals who are filing Chapter 13 bankruptcy cases must have a steady monthly income to repay their debts. In this type of bankruptcy, you can keep all of your properties and assets, but you must pay back your creditors for non-exempt assets through a debt repayment plan. Such a payment plan will run for three to five years.
If you are planning to declare bankruptcy under Chapter 13, you would generally go through the following steps:

  • Consult with a credit counselor to discuss finances and debt reorganization plans with a local attorney, who shall help you document your eligibility.
  • Work with your bankruptcy trustee, to be allowed by the court to repay secured and unsecured debts while retaining your assets.
  • Formally submit your bankruptcy petition to be able to benefit from the automatic stay.
  • Submit your proposed payment plan 14 days after filing the petition and work on making payments within 30 days from filing, even before it has been approved by the bankruptcy court.
  • Go through the confirmation hearing and complete the required debtor education course.

A Chapter 13 bankruptcy case will involve numerous paperwork and supporting documents. These would include court forms and documentation that must be complete and comply with relevant bankruptcy rules. Experienced and hands-on Portland, Oregon bankruptcy lawyers can explain the process and advantages of a bankruptcy declaration in more detail.
 
Why Individuals Who are Struggling Financially Consider Bankruptcy
Being in serious debt is a big problem, and filing for bankruptcy may be the best way for you to rebuild your financial future . Depending on the specific circumstance of the bankrupt individual, filing for bankruptcy can help stop foreclosure, stop repossession, and stop wage garnishment
In general, a Chapter 7 liquidation, for example, is generally ideal for those dealing with credit card bills, medical bills, and personal loans. A Chapter 13 reorganization, on the other hand, is often apt for those with assets that they would want to keep.
Filing for bankruptcy allows you to have a clean slate in terms of your finances. It enabled a lot of individuals to have a fresh start in life after bankruptcy. However, it is essential to seek legal help from a trusted Oregon bankruptcy lawyer before filing bankruptcy.
If you are struggling financially primarily due to unsecured debts, such as medical debt and credit card debt, a Chapter 7 filing is likely an ideal bankruptcy option. On the other hand, a Chapter 13 bankruptcy case is ideal for filers who own many properties that would likely be considered as non-exempt assets.
 
The Need for Legal Services of a Reliable Local Attorney
If you are currently encountering grave financial difficulties, it is best to seek legal advice early on. Consider all of your options, including negotiating directly with the debt collector or creditor or filing for bankruptcy.
If you are planning to file bankruptcy, or are wondering if it is the best course of action to take, you need a lawyer who can help you solve your financial problems.
For individuals who are struggling financially because of unemployment, growing medical expenses, credit card debt, marital issues, or other reasons, filing for bankruptcy may be their only choice. Here, a competent Portland bankruptcy law firm can help. Consult with a dedicated Oregon bankruptcy lawyer at Northwest Debt Relief Law Firm today.
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The post Is Bankruptcy Chapter 7 or 13 a Better Choice? appeared first on Portland Bankruptcy Attorney | Northwest Debt Relief Law Firm.


1 month 1 week ago

                   2021 Top Rated Lawyer by Martindale Hubbell.
James Shenwick, Esq. is proud to announce that he has been selected as
2021 Top Rated Lawyer by Martindale Hubbell


1 month 1 week ago


1 month 1 week ago

 The IRS announced a policy change in their Offer in Compromise ("OIC")program (for people who owe federal taxes) where for OICs accepted after November 1, 2021, the IRS will forego taking the post-OIC acceptance  tax refund for the year of acceptance. An excellent article on this topic can be found at https://procedurallytaxing.com/major-change-to-offer-in-compromise-policy/ 


2 months 2 weeks ago

The proposed law would prohibit “divisive mergers” in Chapter 11, a corporate reorganization tool made available by Texas and Delaware that allows companies to assign liabilities to a subsidiary that can then seek the protective auspices of bankruptcy. See an excellent article on this topic athttps://www.jdsupra.com/legalnews/new-bill-would-end-the-texas-two-step-3111746/?origin=CEG&utm_source=CEG&utm_medium=email&utm_campaign=CustomEmailDigest&utm_term=jds-article&utm_content=article-link


2 months 2 weeks ago

Chapter 13 and Chapter 7 bankruptcy are the most common types of bankruptcies. People file either of these depending on their financial condition and debts. After you have filed for a Chapter 13 bankruptcy, you may be able to convert your case into one that will result in a discharge of debt. 
But can you a file for Chapter 7 after Chapter 13? While the answer is not a clear yes or no, one can easily file for Chapter 7 bankruptcy after filing for Chapter 13 bankruptcy. A reliable bankruptcy attorney in Portland can further explain the different types of bankruptcy so you can make an informed decision.
This article will explain how it is done and give information about the pros and cons.
What is the difference between Chapter 7 and Chapter 13?
In a nutshell, they are quite distinct. Each has several pros and downsides, and for many people, Chapter 7 bankruptcy is the better option. For others, Chapter 13 bankruptcy is the better choice. 
Even if you have your heart set on one of the choices, it is critical to explore both with your bankruptcy attorney if you are unaware of substantial advantages or downsides.
The significant distinction between Chapter 7 and Chapter 13 is that Chapter 7 is designed to pay off unsecured debt such as credit cards, personal loans, and medical bills.
However, Chapter 13 enables you to catch up on secured debts such as your home or car while still eliminating unsecured debt.

  • Chapter 7 examines your assets at the time your case is filed, protects those that are “exempt” – in most cases, everything you own — and discharges the majority, if not all, of your debts.
  • Chapter 13 has a repayment plan for any secured debt (home, car, etc.) that you are behind on while also eliminating the majority, if not all, of your unsecured debts.

 
The Pros and Cons of Filing a Chapter 7 and Chapter 13
Chapter 7 Is Less Expensive Than Chapter 13
Chapter 7 filing fees are often significantly less than Chapter 13 filing fees and costs.
 
The Expediency with which Chapter 7 is Discharged
A Chapter 7 case with no assets is often resolved within four to six months of filing the Chapter 7 petition. This means that you may remove a substantial portion of your unsecured debts in less than 180 days.
 
Preserve Property
While many people who file for bankruptcy under Chapter 7 retain all of their property, there is a possibility that you will lose property under Chapter 7.
 
Put an End to Debt Collection Suits
If a creditor sues you, filing for Chapter 7 bankruptcy will put an end to the litigation. If the debt is dischargeable, the litigation stays, and you are free of the debt. For judgment creditors, Chapter 7 eliminates judgments if the debts are dischargeable.
 
Prevents or Corrects Deficiencies
A shortfall is a balance due to a creditor following a foreclosure or repossession. In other words, you owe more money even though the item was lost. Chapter 7 bankruptcy eliminates deficiency judgments.
Additionally, Chapter 7 prevents inadequacies. If you relinquish collateral in Chapter 7, the creditor cannot attempt to collect more money from you if the property is not sold for the entire amount of the debt.
 
The Disadvantages of Chapter 7 Bankruptcy
Possibility of Property Loss
Chapter 7 bankruptcy is a liquidation bankruptcy. The Chapter 7 trustee may sell any property that is not bankruptcy exempt. The Chapter 7 trustee distributes the debtor’s property sale proceeds to the debtor’s unsecured creditors.
 
Negative Impact on Credit Score and Credit Report
A bankruptcy may lower your credit score, and a public bankruptcy record will appear on your credit report. For ten years, Chapter 7 remains on the credit report. You may wish to read Experian’s guide on the effects of Chapter 7 on your credit score.
 
Certain Debts Are Not Dischargeable
Certain debts, including the majority of taxes and student loans, are not dischargeable in bankruptcy. In bankruptcy, alimony, child support, restitution, certain judgments, and most government debt are not dischargeable. If you apply for bankruptcy under Chapter 7, you will continue to owe these bills after your bankruptcy case is completed.
 
It’s more challenging to avoid foreclosure and repossession.
Because Chapter 7 bankruptcy does not include a repayment plan, you must make up for any missed mortgage and vehicle loan payments fast to keep your home and car during the Chapter 7 process. Chapter 13 bankruptcy helps spread out those payments over three to five years to keep your home and car during the bankruptcy process.
 
Income Requirements
Chapter 7 bankruptcy includes strict income requirements to qualify for a bankruptcy discharge. If you gain more than the state’s median, you may be ineligible for Chapter 7 discharge.
However, if the majority of your debts are company debts, the Means Test may not apply. 
Additionally, you may qualify for Chapter 7 if your disposable income (income available for debt repayment) is less than a particular amount.
 
The Advantages of Chapter 13 Bankruptcy
Preventing Foreclosure on Their Home
A Chapter 13 bankruptcy proceeding may be beneficial to you to avoid having your property auctioned in a foreclosure sale. You can use a Chapter 13 plan to make up for missed mortgage payments (mortgage arrearage) over several years.
Without Chapter 13, you would need to make all missed payments in one big sum, qualify for a loan modification, or restructure your house mortgage to avoid foreclosure. When you are in debt, those options may be unavailable.
You can protect your home if you file a Chapter 13 plan with the assistance of the bankruptcy courts. The Chapter 13 plan enables you to restructure your other debts to resume making regular mortgage payments.
 
The Advantage of Getting Rid of a Second Mortgage
In Chapter 13, you may be able to discharge the second mortgage. If the value of your home is less than the amount owed on your first mortgage, you can submit a motion to declare the second mortgage to be worthless.
If the court grants your motion, the second mortgage’s whole sum becomes an unsecured debt. When your Chapter 13 case is concluded, the second mortgage is discharged. To make this work, your home must be worth at least $1 more than the amount owed on the first mortgage.
 
Eliminating Tax Debts
Generally, income tax debts are not dischargeable (forgivable) in bankruptcy. You can, however, spread those payments out over three to five years to assist you in repaying old tax arrears.
Additionally, if a portion of your income tax debt is older and satisfies certain criteria, you may be entitled to settle your tax debt for less than you owe the government.
 
 Assistance With Automobile Payments
Chapter 13 might also assist you in avoiding repossessions if you are overdue on your car payments. If you owe more on your car than it is worth and have owned it for 910 days or longer before declaring bankruptcy relief, you may be eligible to reduce your car payments through your Chapter 13 plan.
If not, you can extend the auto loan term by another 60 months, which may bring the payments down to an affordable level.
 
Assistance with Child Support Payments
Domestic support obligations (DSOs), alimony, and back taxes on child support are not dischargeable in bankruptcy. However, your Chapter 13 plan may include back child support and past-due alimony payments. 
Rather than face jail time or other court consequences, you can use the bankruptcy process to catch up on past-due DSO payments. To stay in Chapter 13, you must make all future alimony and child support payments on time.
 
Eliminating Unsecured Debts
Unsecured debts in general, such as credit card debts, medical bills, unpaid utility bills, unpaid rent, and personal loans, can amount to tens of thousands of dollars.
Depending on your financial condition, you may be able to eliminate those debts through Chapter 13 bankruptcy by paying only a tiny portion of the amount under the bankruptcy repayment plan.
 
The Disadvantages of Chapter 13 Bankruptcy
Negative Impact on Credit Score and Credit Report
You may be curious about the impact of a Chapter 13 bankruptcy on your credit score and report. It varies depending on your starting credit score, but you could lose between 100 and 200 points.
Additionally, Chapter 13 (like Chapter 7) is part of your public record and is accessible through PACER. However, Chapter 13 bankruptcy remains on your record for seven years, compared to ten years for Chapter 7 bankruptcy.
 
Limited payment flexibility
Chapter 13 bankruptcy frequently has limited payment flexibility, which means that if your Chapter 13 obligations are excessive, you may have few options. You are not permitted to acquire debt or sell assets without the bankruptcy court’s approval during that period. 
Additionally, if your income improves, your Chapter 13 payment will likely increase as well. You are expected to contribute all available funds to your Chapter 13 plan.
 
Duration of time
While you can quickly file for Chapter 13 bankruptcy, the plan will take time to complete before you are freed. While you can complete a Chapter 13 bankruptcy in 90 days, the average Chapter 13 bankruptcy case lasts three to five years. 
There are some outliers, but many plans are rather lengthy. This is frequently why some individuals explore debt settlement in addition to filing for Chapter 13 bankruptcy.
 
How to File from Chapter 13 to Chapter 7
Unless you’ve already been discharged under Chapter 7 in the prior eight years, you can transfer your Chapter 13 to Chapter 7. 
You will have to file a Notice of Conversion and pay a fee. This warning is not on an official bankruptcy form, although your court may have one.
Remember that you must still qualify for Chapter 7 bankruptcy to be discharged.
 
Reasons to file a Chapter 7 after a Chapter 13
1. A Chapter 7 case will end your obligation to pay a Chapter 13 plan.
After filing a Chapter 13, a Chapter 7 case can stop the harassment of creditors while letting you keep your house. Only about 10 percent of bankruptcy cases are filed twice, and the vast majority of those cases file Chapter 7 rather than Chapter 13.
 
2. A Chapter 13 case can stop foreclosure and often stop wage garnishment.
But it doesn’t usually stop lawsuits, and it won’t stop a creditor from suing you personally. A Chapter 7 case can stop a creditor from filing a lawsuit against you.
 
3. A Chapter 13 case will wipe out much, but not all, of your unsecured debt.
A Chapter 7 case will wipe out all your unsecured debt.
 
Consult a Portland Bankruptcy Lawyer
Shifting a Chapter 13 case to a Chapter 7 bankruptcy can be advantageous. It will eliminate qualified debt, including outstanding balances, health care costs, and personal loans if you qualify. 
However, you risk losing essential items. It’s advisable to find a competent bankruptcy lawyer to explain in detail the options suitable for your financial situation. Call us today for a free consultation!
The post Can I File A Chapter 7 After Chapter 13? appeared first on Portland Bankruptcy Attorney | Northwest Debt Relief Law Firm.


2 months 2 weeks ago

Sports Gambling Comes to Virginia Like most people, I’ve noticed that ads for sports gambling have taken over the TV (at least on basketball and college football, which is about all the TV I watch.) Sports gambling was legalized in Virginia April last year and began in January 2021. Now in October and November, I’ve […]
The post Sports Gambling Comes to Virginia by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.


2 months 2 weeks ago

Sports Gambling Comes to Virginia Like most people, I’ve noticed that ads for sports gambling have taken over the TV (at least on basketball and college football, which is about all the TV I watch.) Sports gambling was legalized in Virginia April last year and began in January 2021. Now in October and November, I’ve […]
The post Sports Gambling Comes to Virginia by Robert Weed appeared first on Northern VA Bankruptcy Lawyer Robert Weed.


2 months 2 weeks ago

 Evictions and BankruptcyOn November 7, 2021, the New York Times published an article titled "With Cases Piling Up, an Eviction Crisis Unfolds Step by Step". The article can be found at https://nyti.ms/3mPXsGf The article stated that evictions are on the rise nationwide. We are receiving more and more calls and emails from individuals facing evictions and/or businesses in distress at Shenwick & Associates.The first step an individual or business facing eviction should take is to consult with an experienced litigator or landlord-tenant attorney.  Can bankruptcy help these people and businesses? Yes, it can. Bankruptcy can provide temporary or permanent relief from many of these problems.By filing a bankruptcy petition, all litigation against the Debtor (person or company that owes money) is automatically stayed pursuant to section 362 of the bankruptcy code. The purpose of section 362 is to give the debtor breathing room!Chapter 13 of the Bankruptcy Code allows an individual debtor to reorganize pursuant to a   confirmed chapter 13 plan. A chapter 13 plan could permit the debtor to keep their house or lease, despite the pending eviction action. Chapter 13 plans are generally funded by 3 to 5 years of the debtor's future earnings. Corporations and limited liability companies cannot file for chapter 13 bankruptcy.Individuals who don't want to keep their lease or home and owe money to banks, landlords, or creditors can file for chapter 7 bankruptcy, which will wipe out their debts and give them a "fresh start."Corporations or LLCs may file Chapter 7 or Chapter 11 bankruptcy or a new Subchapter V Chapter 11 bankruptcy. Debtors' finances are reviewed holistically, including the property they own, who owes money to them, a recent tax return and an after-tax monthly budget. For business we review their Income Statement, Balance Sheet, a recent tax return and guarantees. If you or your business is contemplating bankruptcy, call or email Jim Shenwick, Esq. 212 541 6224 or [email protected] to learn about your options. 

    


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