Advantage Of Chapter 13

Help for Student Loans

Published on: January 25, 2014 | Frank Coxwell

If you are having trouble paying back your student loan debt, the Department of Education has options that will give you more protection from debt collectors collecting on federal education loans. These regulations should make it easier for you to get your federal student loans out of default.

These rules do not apply to private student loans, only to loans made or guaranteed by the federal government. For example, if you are in default you can”rehabilitate” loans by making nine “reasonable and affordable” on-time payments during a period of 10 consecutive months. You must agree in writing to make these 9 voluntary payments (as determined by your loan holder) within 20 days of the due date. This will allow you to get out of default and become eligible for further federal student aid or other repayment programs. Keep in mind that Student Loan Rehabilitation is a 1-time opportunity only. It cannot be repeated.

Some private debt collectors who were collecting on federal loans fail to offer payments that borrowers can afford; instead offering payments based on a percentage of the borrower’s total debt. Such payments mean increased commissions for the collection agencies, but are unworkable for borrowers. Some debt collectors try to also demand minimum monthly payments without telling people about the more affordable alternatives, even though the laws of federal student aid does not require those minimum payments. In 2014, the Department of Education really cracked down on these practices.

Foreclosure Prevention Week MPB Money Talks Radio

Published on: April 2, 2013 | Frank Coxwell

I had the pleasure of being a guest again on the Mississippi Public Broadcasting (MPB) show – Money Talks – on April 02, 2013. It was “Foreclosure Prevention Week” so we spent the hour discussing the process of foreclosure in Mississippi and the options available to consumers to save their home. If you didn’t get a chance to hear the conversation, you can go to their main site and take a look at all episodes – they have a lot of great information on all sorts of financial topics and a lot of great guest speakers.

Be sure to catch their show Tuesday’s at 9:00am on MPB Think Radio. And be sure to save this link to their home page as a favorite. Thank you Kevin, Chris, and Nancy! Hope to see you again soon!

Must I be current on my house to file chapter 7 bankruptcy?

Published on: February 12, 2013 | Frank Coxwell

Yes and No. In most cases as long as you are up to date on your house payments you can keep your home. If you are not current, the bankruptcy filing protects the home from foreclosure and this could give you the time you need to get caught up, if you were only a couple of months behind.

If you are significantly behind on your house payments, then a chapter 13 is the only way to go if you want to save your home. The most important thing is to file the bankruptcy as soon as possible so they don’t foreclose on your home. Both a chapter 7 or 13 bankruptcy filing stops foreclosure. The mortgage company would have to then get permission from the bankruptcy court to start the foreclosure process up again. It’s important to meet with an experienced bankruptcy lawyer to lay out a proper strategy for dealing with your debts in a way that protects the property you wish to keep.

Can mortgage company foreclose while reviewing for modification?

Published on: December 18, 2012 | Frank Coxwell

At least twice a month I receive calls from homeowners who are in the middle of the modification process with their mortgage company and they get notice of a foreclosure. Over and over they had been told the modification was still being reviewed. In some cases they were told they’d been approved. But all of a sudden they find their home is being advertised in the newspaper and a sale date is set at the courthouse. Mortgage companies review loans for modification and try to foreclosure at the same time. This is known as “dual tracking”. They don’t stop the foreclosure process when a mortgage is considered for a modification. If you are in the modification process with your mortgage company you can never assume that it will be approved or they won’t foreclose. The foreclosure process in Mississippi is quick, so you can’t trust anything they tell you over the phone. If you become aware your home is in foreclosure, contact our office immediately. We can stop the foreclosure sale through filing a Chapter 13 bankruptcy and you can still follow-up with a modification, if needed. You never want to be in a position of trying to get your home back after the foreclosure. Better to be safe than sorry and stop the foreclosure before it happens.

Can I get my Chapter 13 Plan payments lowered?

Published on: December 7, 2012 | Frank Coxwell

Possibly, but first you need to understand that a Chapter 13 plan is not based on your income. It does not fluctuate depending upon how much you make. The Chapter 13 plan amount depends upon what you plan on keeping and/or what creditors you plan on paying through the bankruptcy. For example, if you are paying for only your home through your plan, the amount of the payments will be based upon the mortgage amount then that amount spread out over the life of the plan to catch up your back notes. This amount won’t change unless your mortgage note happens to change.

However, if you are paying for several things – such as a student loan, a vehicle, a home, and a furniture note – through your Chapter 13 plan, the payments could become lower if you decide to stop paying toward the student loan or decide to surrender a vehicle, or the home, etc.

Since a Chapter 13 plan is dependent upon who you plan to pay and what you plan to keep – you can decide to change (with some exceptions) who you are paying and/or what you are keeping in order to lower the note.

How many times can you file bankruptcy?

Published on: November 29, 2012 | Frank Coxwell

Although there is not a limit on the number of bankruptcy cases you can file and no limit to the amount of time in between filings, there are limits to when you are eligible to receive a proper “discharge”. So why would you want to file a bankruptcy case if you know you cannot receive a discharge? There are several reasons why this strategy may be utilized. For example, say that you recently filed a chapter 7 bankruptcy and wiped out your unsecured debt but you have student loan or tax debt that is non-dischargeable. You could turn around and file a chapter 13 bankruptcy in order to be protected from garnishments, lawsuits, levies, etc relating to the student loans or tax debts for up to 5 yrs even though you would not receive a discharge.

Here are the time frames that must occur between filings for discharge eligibility (Note: the time is counted from date filed to date filed):

8 years between Chapter 7’s. -727(a)(8)

Do I have to report my spouse’s income if I’m filing alone?

Published on: November 28, 2012 | Frank Coxwell

If you are filing bankruptcy as an individual (not jointly with your spouse), yes, you must still report your spouse’s income. However, this in no way includes your spouse in the filing. The court simply looks at your total household income for calculating eligibility (Means Test) and for your post-bankruptcy household budget (schedule I and J). Even though your spouse is not filing with you, it is highly recommended that you both participate in the consultation so that both of you understand the process and requirements. And as mentioned before – have decided that the best strategy for addressing your financial situation is to file individually.

There is an exception to this though if you are married but separated. If you and your spouse are separated, your total household income is your income. If your spouse is paying domestic support, you will need to include that in your totals.

Offering 2 Classes in 2012 Fall Millsaps Community Enrichment Series

Published on: August 11, 2012 | Frank Coxwell

I will be teaching in the Millsaps College Community Enrichment program – 2012 Fall Series that is open to the public. I will be hosting 2 sessions under the section “Money & Business”. Click here to register.

“Who Owns your Home? Mortgage Securitization in Mississippi” will be a 2 class session

Oct 4 & Oct 11 from 6:00pm – 8:00pm. Millsaps Tuition Cost: $40.00 per person.

Can filing a Chapter 13 protect the co-signer of my student loan?

Published on: July 12, 2012 | Frank Coxwell

I get countless calls from people asking what they can do to about their parents or grandparents who co-signed for them on a student loan and are now facing garnishment, loss of their tax refunds, or even seizure of their bank accounts because they co-signed and the loans have not been paid.

This is a common tactic for debt collection on student loans. If the student isn’t working – they will go right after anyone who co-signed for the loan. And they have broad powers – there is no notice required – they can garnish, etc without warning unlike collection of normal debt where there must be a lawsuit filed and judgment obtained first, etc.

It’s pretty well known you cannot wipe out student loans through bankruptcy, but if you file a Chapter 13 bankruptcy, you can stop all action – against you AND against anyone that co-signed for your student loan. Chapter 13 bankruptcy protects the debtor and co-debtor. Both do not have to file – just one. If the co-debtor files it protects the main debtor and vice versa. For example – mother co-signed for son’s student loan. Mother files Chapter 13 bankruptcy (maybe even for other reasons) – it protects the son regarding the student loan they both signed for. Or son files Chapter 13 bankruptcy – it protects the mother.

I lost my license because of past due support. Can bankruptcy help me get it back?

Published on: July 7, 2012 | Frank Coxwell

The “withholding, suspension, or restriction of a driver’s license, a professional or occupational license, or a recreational license, or the reporting of overdue support to a consumer reporting agency, or the interception of a tax refund” are actions that can be taken upon an individual as a penalty for failure to pay support. These penalties are excepted from the Automatic Stay and can continue despite the initial filing for protection under bankruptcy. However, by filing a Chapter 13 bankruptcy the Chapter 13 plan will provide for payment of the past due amount as well as offer provision for the current and ongoing amount owed to ensure that the debt does not become delinquent at any time during the life of the Chapter 13 plan. Once the Chapter 13 plan is confirmed (you file, attend a 341 hearing approximately 30 days later, then the bankruptcy judge approves the plan approximately 30 days after that thus “confirming” the plan) with payment of the past due support provided in the plan, any continuing action of any of these penalties would be in violation of the confirmed plan and the creditor could be subject to sanctions if they continue any such actions against the debtor. So bottom line is yes, a Chapter 13 bankruptcy could provide some relief regarding these types of penalties.