Chapter 13

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)

Does my spouse have to file bankrutpcy with me?

Published on: November 28, 2012 | Frank Coxwell

No. There may be reasons why it would benefit you both to file together, but the choice is yours individually to make. You cannot be forced to file with your spouse and likewise, you cannot force your spouse to file with you. When you file alone, you are filing “individually”. When you file together, you are filing “jointly”. Everyone’s situation is unique and depends on the type of debt you have and whether or not you both are responsible for the debt, etc. It is important to review the possibilities of filing individually vs jointly to see which way would benefit you both the most.

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.

What does it mean to “cram down” a debt in a Chapter 13?

Published on: July 11, 2012 | Frank Coxwell

First you should understand that when we talk about “cramming down” a debt, it is referring to a secured debt (such as debts for vehicles, furniture, household goods and appliances). Referring to a debt as secured means there is some type of collateral attached, which you would lose if you defaulted on the debt.

All secured debts can be stretched out in a Chapter 13 up to the 5 year max period. This is often helpful by lowering the note. However, you may find even more benefit within a Chapter 13 regarding secured debts through a “cram down”.

“Cram down” of debt means that you can reduce the amount you must pay to be equal to the current value of the collateral rather than the current amount owed if certain criteria is met.

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.

Can bankruptcy keep me out of jail for failure to pay child support?

Published on: July 6, 2012 | Frank Coxwell

Filing Chapter 13 bankruptcy can be used to pay past due support over an extended period of time (max of 5 years within a single Chapter 13 plan) and yes, it can protect the debtor from going to jail for previously failing to pay what was due. It’s important to note that you cannot discharge (wipe out) in any type of bankruptcy (Chapter 7, Chapter 11, Chapter 12, Chapter 13, etc) debts relating to child support, maintenance, alimony, and other domestic support obligations. Not only will the Chapter 13 plan provide for catching up the past due amounts, but it will also provide for the current and ongoing payments in order to prevent the debtor from becoming behind in support during the Chapter 13 bankruptcy plan period.

Can bankruptcy help with tax debt?

Published on: July 5, 2012 | Frank Coxwell

In a Chapter 7 and Chapter 13, as long as four basic criteria are met, both state and federal income taxes can be discharged.

The tax return due date was at least 3 years before filing bankruptcy.
The filing of the tax return must have been done at least 2 years before the bankruptcy filing.