How Can Bankruptcy Help Alleviate My Stress

How Can Bankruptcy Help Alleviate My Stress

(part two)

We are continuing our series on how filing bankruptcy helps relieve the stress of being unable to fulfill certain financial obligations.  As a premier bankruptcy law firm serving the Tampa Bay area, we help clients with bankruptcy, IRS resolution, liens, foreclosures, credit problems and home buying assistance.  Our bankruptcy lawyers are often asked about the bankruptcy process and how it can help alleviate stress surrounding unpaid bills and other financial issues. Our previous article discussed how filing bankruptcy can dissolve most unsecured debt and eliminate responsibility for some secured debt.  Today, we will look at two more ways filing bankruptcy can help.

Postpone Foreclosures, Evictions and Repossessions

If you are facing a foreclosure, eviction or repossession, bankruptcy can postpone the process. Filing bankruptcy initiates an automatic stay. So, an eviction that is in litigation will be temporarily suspended.  If you are facing a foreclosure or repossession, this will be halted.  Once the stay is lifted, if you filed Chapter 7, you will be required to either bring your account current or relinquish the property. If you filed Chapter 13, you may be allowed to keep the asset provided you work on catching up on past payments due. Your bankruptcy attorney will evaluate your financials and make a recommendation that best suits your situation.

Stop Collections and Harassment

One of the biggest benefits of filing bankruptcy is that most collections, wage garnishments and harassing phone calls stop.  This provides tremendous relief and some breathing room as your bankruptcy lawyer strategizes the best outcome for your specific situation.

When it comes to filing bankruptcy, Tampa residents trust the Law Office of Thomas A. Nanna.  We are an experienced bankruptcy law firm dedicated to handling your case in a professional manner.  We work with clients throughout the Tampa Bay area including Pasco, Pinellas, Hillsborough, Manatee, Sarasota and Polk counties. Give us a call to learn more today.

What is the Difference Between Chapter 7 and Chapter 13 Bankruptcy?

What is the Difference Between Chapter 7 and Chapter 13 Bankruptcy?

When filing bankruptcy, there are two options to consider, Chapter 7 and Chapter 13.  While both provide relief, the way your debt is handled differs with each.  Regardless of whether you file Chapter 7 or Chapter 13, you should engage a qualified bankruptcy law firm with experienced bankruptcy lawyers that can help determine the best course of action for your specific situation.  Let’s take a look at the basic differences between Chapter 7 and Chapter 13:

Chapter 7 Bankruptcy

Filing bankruptcy under Chapter 7 provides debt relief for most types of unsecured debt.  If you qualify, your bankruptcy lawyer will discuss how this specifically works in your case.  Chapter 7 often includes liquidating assets, dismissing unsecured debt and offers protection from creditors.  Examples of debt that may not be discharged through filing bankruptcy under Chapter 7 include tax burdens, student loans, debt incurred as part of a DUI, debt arising out of fraud, criminal / court fines, alimony and child support.

Chapter 13

Filing bankruptcy under Chapter 13 is more of a debt consolidation and reorganization process.  Your bankruptcy attorney may recommend this if you still wish to make good on your debts and/or you do not qualify for filing bankruptcy under Chapter 7.  Chapter 13 gives you some breathing room by allowing you to consolidate your debts and pay one monthly payment over a designated amount of time (often three to five years).

If you are considering filing bankruptcy, the Law Office of Thomas A. Nanna can help.  Our experienced bankruptcy lawyer will provide you with the guidance and direction to help you achieve the relief you need.  Don’t trust just anyone when filing bankruptcy.  Tampa Bay residents have come to rely on our knowledge, experience and compassion to help them navigate through difficult times. Give us a call to learn more today!

How Can Bankruptcy Help?

How Can Bankruptcy Help?

There is a lot of information on the Internet about filing bankruptcy.  Some information is accurate, and some is false.  As a premier bankruptcy law firm, our bankruptcy attorneys take time to ease our clients fears and thoroughly answer any questions they have about the process of filing bankruptcy.  Our next series of articles will cover some of the ways filing bankruptcy helps people get back on their feet. Let’s take a closer look.

Dissolves Most Unsecured Debt

Unsecured debt is debt incurred without a promise to return purchased property.  Examples of unsecured debt includes credit cards, utility bills, medical bills and service contracts.  Bankruptcy attorneys often include a list of unsecured debt when filing bankruptcy on your behalf.  Most unsecured debt will be wiped out depending on the type of bankruptcy filed.

Eliminates Responsibility for Secured Debt

A bankruptcy lawyer may list secured debt in your bankruptcy filings.  Secured debt is debt with collateral attached, such as a home, automobile, boat, etc.  While filing bankruptcy may wipe out some secured debt, you will be required to return the property attached to it.

If you are in over your head in debt, you don’t have to go through it alone.  The Law Office of Thomas A. Nanna is an experienced bankruptcy law firm dedicated to helping you get resolution and relief. Our bankruptcy lawyers work to ease your anxiety and help you “reset” your finances so you can move on with your life. If you are contemplating bankruptcy, Tampa Bay residents know who to call.  We work with clients throughout Hillsborough, Pasco, Pinellas, Polk, Manatee and Sarasota. Schedule your free consultation today.


Lien Stripping in Bankruptcy

Lien Stripping in Bankruptcy

Liens can be stripped off of the debtor’s assets in Chapter 11 or Chapter 13 when the equity in the asset, after deducting senior liens from the property’s current market value, is less than the amount of the unsecured portion of the lien can be eliminated.

There is a special exception to this concept that limits lien stripping when the lien is a voluntary lien, like a mortgage, on property that is the debtor’s principal residence. Under this exception, voluntary liens on a home can be stripped off only if there is no equity in the property at all, after totaling the senior liens, to which the lien in question could attach. Unfortunately Congress has thus far failed to change to bankruptcy law to allowing the modification of home mortgages by reducing the amount of the lien to the current value of the property.

Section 506 of the Bankruptcy Code acknowledges that a lien is only a secured claim to the extent there is value in the asset to which it attaches. To the extent that the claim exceeds the value of the collateral, that portion of the claim is unsecured.

Contrast this procedure to lien avoidance pursuant to § 522, where only judicial liens such as judgment liens (or voluntary liens on household goods) can be avoided if the property would otherwise be exempt.

Liens Secured by Vehicles

The most common application of lien stripping is the reduction of car loan liens to the present value of the car. Thus a lender holding a $12,000 claim secured by a car now worth $10,000 has a secured claim of $10,000 and a unsecured claim for $2,000. Two thousand dollars of the lien may be stripped off the asset (the car) in a reorganization. The plan must provide for payment in full of the secured portion of the debt; the unsecured portion can be paid little or nothing along with other unsecured claims.

Recent changes to the bankruptcy law attempt to limit lienstripping on vehicles purchased within 910 days of the bankruptcy filing. The amendment says that ” §506 does not apply” to such vehicles. The intent was to compel payment of car loans made within 2 2/3 years of the filing payable in full, despite the fact that the collateral is often worth thousands of dollars less than the debt it secures.

Tax liens

Tax liens can be stripped off in reorganization proceedings (Chapters 11 and 13) to the extent that the lien does not attach to equity in property. Tax liens can’t be avoided in Chapter 7 on the grounds that they impair exemptions because they are statutory liens, not judicial liens.

If the tax underlying the lien is dischargeable in the Chapter 7, the bankruptcy court can determine the amount of the lien that is secured at the time of the filing. Payment of that sum entitles the debtor to the release of the lien.

What debts are dischargeable?

What debts are dischargeable?

Generally, all debts listed on the petition are dischargeable. However, certain types of debt are not dischargeable. The non-dischargeable debts include, but are not limited to:

a. Certain taxes and fines;

b. Debts arising from certain fraudulent conduct;

c. Debts not listed in your bankruptcy petition;

d. Alimony, child maintenance or support, and certain other related debts arising out of a divorce decree or separation agreement;

e. Debts caused by the Debtor’s willful and malicious injury to another;

f. Government guaranteed student loans;

g. Debts caused by a death or personal injury related to your operation of a motor vehicle while intoxicated; and

h. Post-bankruptcy condominium or cooperative owner’s association fees.

What is the role of a Trustee assigned in a chapter 7 or 13 case?

What is the role of a Trustee assigned in a chapter 7 or 13 case?

Under Chapter 7 Bankruptcy, an impartial trustee is appointed to administer the case by collecting and liquidating the Debtor’s non-exempt assets in a manner that maximizes the return to the Debtor’s unsecured creditors.

Under Chapter 13 Bankruptcy, an impartial trustee is also appointed to administer the case. The primary roles of the chapter 13 trustee are to determine the feasibility of a Debtor’s repayment plan for the court and to serve as a disbursing agent, collecting payments from Debtors and making distributions to creditors.

What is a 341 meeting?

What is a 341 meeting?

This meeting is referred to as the “meeting of creditors.” All creditors are notified so that they may attend, but their attendance is not required. Debtors have a duty to appear and testify under oath and answer questions by creditors. This meeting is presided over by the trustee assigned to the case and is held approximately 40 days after the petition is filed. Debtors are required to provide photo identification and proof of social security number to the assigned trustee. A Debtor’s failure to appear may result in dismissal of the case. If a continuance or change in the hearing date is sought, the trustee assigned to the case must be contacted.

What is a Bankruptcy Discharge?

What is a Bankruptcy Discharge?

It releases the Debtor from personal liability for discharged debts. Thus, it prevents the creditors owed those debts from taking any action against the Debtor to collect the debts. Most, but not all, types of debts are discharged if they existed on the date the bankruptcy case was filed and were listed on the schedules. Some of the debts that are not discharged are discussed in question 15. Bankruptcy law regarding the scope of a discharge is complex, and Debtors should consult competent legal counsel prior to filing.

Can a discharge be denied?
Under certain circumstances, 11 U.S.C. § 727 provides the Debtor’s discharge may be denied in a chapter 7 case. Grounds for denial exist when the Debtor: (1) failed to keep or produce adequate books or financial records, (2) failed to satisfactorily explain any loss of assets, (3) committed a bankruptcy crime such as perjury, (4) failed to obey a lawful order of the bankruptcy court, or (5) fraudulently transferred, concealed, or destroyed property that would have become property of the estate.

What is the difference between a discharge being denied and a debt being declared nondischargeable?
The court can deny the Debtor’s discharge of all debts, or determine that a particular debt or debts are nondischargeable. If the court denies the discharge of all debts, then the Debtor will still be legally responsible for all the debts as if no bankruptcy petition had ever been filed. If only certain debts are ruled nondischargeable, the Debtor will still receive a discharge order. However, the Debtor will remain legally responsible for those nondischargeable debts. For a discharge to be denied, either as to a particular debt or as to all debts, someone must file an adversary proceeding (lawsuit) with the court. That party must then prove one of the grounds for denial of the discharge or for a debt to be declared nondischargeable.

How is a Debt Classified?

How is a Debt Classified?

How is a debt classified as secured, unsecured, priority, or administrative?

A secured debt is a debt that is collateralized by property. A creditor whose debt is “secured” has a right to foreclose or take property to satisfy a “secured debt.” For example, a mortgage loan is likely “secured” by a Debtor’s home. This means that the lender has the right to foreclose upon and take the home if the Debtor fails to make the loan payments.

An unsecured debt arises when you promise to repay someone a sum of money at a particular time, but you have not pledged any property as collateral for the debt.

A priority debt is a debt entitled to priority in payment, ahead of other debts. Please refer to 11 U.S.C. §507 of the Bankruptcy Code for a listing of such priority claims.

An administrative debt is a category of priority debt. Generally, it is created when someone provides goods or services to your bankruptcy estate after you file your petition. An example of an administrative debt is the fee charged by an attorney or other authorized professional for services rendered after the bankruptcy case has been filed.

What Chapter is Right for Me?

What Chapter is Right for Me?

Your decision whether to file bankruptcy and under which chapter to file depends on your particular circumstances. In general, Chapter 7 is appropriate when the Debtor has insufficient income to pay a portion of his/her debts, and the Debtor is not seeking to keep non-exempt property. Otherwise, if the Debtor has an income or property and can afford to repay at least some of his/her debts, Chapter 11, 12 or 13 may be appropriate, depending on whether the Debtor is an individual, partnership, corporation, or family farmer. The decision whether to file a bankruptcy case and under which chapter is an extremely important decision and has tremendous financial impact. Consequently, this decision may require expert advice from a bankruptcy attorney. Thomas A. Nanna is a Bankruptcy Attorney in Tampa, Florida.