Answer, yes; but with some words of caution. First, chapter 13 bankruptcy is a repayment plan; the goal of chapter 13 is to allow the individual or family to get back in control of their finances. The main question in chapter 13 is “how much is the monthly payment?” (more…)
Can You Buy a Car Before Filing Chapter 13 Bankruptcy?
May 19th, 2012 by Matt BerkusWhy Can’t I Sell My House “During” My Bankruptcy?
May 19th, 2012 by Matt BerkusUnderstanding Bankruptcy Exemptions? Explaining the technical nature of the bankruptcy estate and bankruptcy exemptions can be daunting, and admittedly, does involve legal hair splitting. As a result, the information consumers have on the subject leads them to believe that assets exempt in bankruptcy are theirs to do with as they please even after filing chapter 7 bankruptcy; consumers understand that bankruptcy exemptions mean that they will not lose an exempt asset in bankruptcy. But information and knowledge on the interplay between the bankruptcy estate and exemptions is lacking. So, let’s clarify how bankruptcy and exemptions work. (more…)
What Are the Administrative (Statutory) Student Loan Discharge Options?
May 17th, 2012 by Matt BerkusStudent loan debt is one of two unforgivable debts (the other being back child support). Once you take on a student loan, whether you are a borrower or cosigner, you are basically stuck with debt…almost!
You may be aware that it is at least possible to discharge student loan debt in bankruptcy. See my discussion of that topic here. But for federally guaranteed student loans, but not private student loans, there a handful of administrative, or statutory, discharge alternatives. But these alternatives are very much situation specific and unfortunately, there is no catch all discharge option. Also, I must stress, there is no legal distinction between a borrower and a cosigner, the same rules applies; unfortunately, a cosigner is equally liable for a student loan debt. (more…)
Surrendering Investment Property in Bankruptcy, What are Tax Consequences?
May 7th, 2012 by Matt BerkusQuestion:
I am filing chapter 7 bankruptcy tomorrow. I am surrendering my owner occupied 4-plex as part of that process, I lived I one of the units and own no other property) If I surrender my owner occupied 4-plex in bankruptcy, does a tax event occur on the day the bankruptcy is discharged or the day the property is foreclosed upon? What confuses me is that the way things are now with the banks, it is entirely possible that the foreclosure might not occur until a year after the surrender which would put it after the year I filed bankruptcy. (more…)
Buy and Bail, Just Not an Option!
May 1st, 2012 by Matt BerkusQuestion:
My chapter 7 bankruptcy was discharged 3 years ago, and the house was included. We have been living in the house for the full 3 years, although I stopped mortgage payments in November of 2010. My credit report says “discharged in BK”, and I am trying to sell the house and buy a new one at the same time. On paper, and legally, it is not a short-sale because a short-sale is selling a house for less than what you owe. According to a federal judge, 3 years ago, I do not owe anything. My question is how would this be reported on my credit if I wanted to buy a new home the day after the old one closes?
Answer:
I hate to say it, but you are suffering from some false assumptions. How your situation is reported on your credit report is immaterial. (more…)
10th Circuit Requires Proof of Note for Foreclosure.
February 3rd, 2012 by Matt BerkusThe 10th Circuit Court of Appeals, in the case of Miller vs. Deutsche Bank National Trust (opens PDF), requires mortgage loan servicers to prove possession of the mortgage note in order to have proper standing to file a Motion for Relief From Stay in bankruptcy court. A Motion for Relief from Stay is a required pleading in bankruptcy court if a secured creditor wants to proceed with foreclosure or repossession, notwithstanding the bankruptcy. The issue in Miller was whether Deutsche Bank was the proper moving party. The court held that there was no evidence in the record sufficient to show that Deutsche Bank was a proper party to bring the Motion for Relief from Stay, and by implication, not a proper party to foreclose on the Miler’s mortgage. (more…)
Considering Bankruptcy, The “High Road” Ends At A Cliff!
January 29th, 2012 by Matt BerkusIn many a consultation I have heard, and I am sure if you are considering bankruptcy, you might have said this to yourself at some point…
“I want to do the right thing and pay my bills.”
“I want to take the high road and not file bankruptcy.”
Or some variation on the moral objection to bankruptcy.
Can You Pay Student Loans in Chapter 13 Bankruptcy?
December 18th, 2011 by Matt BerkusBut for a showing of undue hardship, student loans are non-dischargeable in bankruptcy; outside of bankruptcy, there are few options for a struggling debtor to find relief from crushing student loan debt. Moreover, student loan debt has no special status in bankruptcy; you cannot “just choose” to pay your student loans ahead of other unsecured debt (e.g. credit cards).
So, what is a struggling debtor to do? Chapter 13 bankruptcy may provide relief to a the student loan debtor under certain circumstances: the chapter 13 can stop collection and garnishment activity, and eliminate other debt problems such as credit card debts and stop a foreclosure; but the debtor will usually emerge from chapter 13 bankruptcy still needing to pay on student loans. (more…)
