One of the primary purposes of bankruptcy is for debtors to discharge certain debts in order to give them a “fresh start”. As a debtor in bankruptcy, you can empower your “fresh start” by understanding and utilizing all of the tools available to you under the bankruptcy laws. Many of our bankruptcy laws are complex and impose strict requirements for compliance upon a debtor. Get Help. Failure to comply with the bankruptcy laws could result in the dismissal of your case. The same bankruptcy laws that impose strict requirements upon a debtor also provide various tools to help maximize and empower a debtor’s “fresh start” after discharge.
Things to consider – Your first plan payment is due within 30 days from the date of filing of your case. If you have not already done so, please make your first plan payment to the Trustee. If you fail to make your plan payment, your case will be dismissed. Have you filed all of your schedules? You must promptly file your schedules, statements and plan? Your case will be dismissed if you don’t file all required documents.
Have you had one or more cases dismissed within the past year? If so, the automatic stay in your new case may be temporary or it may not go into effect at all. Your “fresh start” may be put on hold if the automatic stay is limited in your case. If you act promptly, you can ask the Court to extend or impose the automatic stay in your new case.
Do you owns a vehicle with an outstanding loan balance that is higher than the value of the vehicle? If so, consider a cramdown of the vehicle. A cramdown essentially means that you pay the secured creditor the current value of the vehicle within your Chapter 13 plan. The cramdown of a vehicle can also lower the interest rate on the car loan and make it easier for you to fund your Chapter 13 plan.
Has a creditor obtained a judgment against you? If so, a judgment can become a lien against your property. Generally, liens survive the bankruptcy case unaffected by the discharge. Liens can impair your ability to sell or refinance your property after bankruptcy and therefore negatively impact your “fresh start”. There are some steps you can take in a bankruptcy case to avoid (remove) certain liens. For example, liens that attach to property that you claim as exempt can be avoided to the extent the lien impairs of the value of your allowed exemption.
Do you own an undersecured property with a second mortgage or lien? If so, you may consider a lien avoidance. A lien avoidance essentially means that you will ask the Court to treat the under secured second mortgage or lien as an unsecured creditor in your Chapter 13 plan and avoid the lien upon discharge. You must file a motion to avoid lien and the lien avoidance must be reflected in your Chapter 13 plan.
This brochure only provides a brief description of the tools available to you in bankruptcy. If you would like more information about your options and the tools available to you in bankruptcy, please do not hesitate to call me for a free case review.