Chapter 13 Bankruptcy .

Edwards Finance > Loans

Q. I have done some research into bankruptcy and feel that Chapter 13 would be the way to go. While I may not be able to pay everything in full, I would pay some portion. We do not own a home, so that is not a consideration here. Now, the questions... 1. We have a number of assets that would most likely be non-exempt (such as a piano that was given to our daughter for her birthday a number of years ago, a couple of collections of items) but we would rather not sell. My understanding with Chapter 13 is that these would be controlled by the state while in the repayment plan and, at a minimum, we would pay back the value of all non-exempt assets. Is there ever a situation in Chapter 13 where it is ruled that a non-exempt asset must be liquidated instead of including it in this total to be payed back? 2. Is it up to the courts how much you will pay back over the three- to five-year period (i.e., can they rule that, even though you have $8,000 in non-exempt assets that you are keeping, you're income/budget would allow you to pay back $20,000 over the term of the bankruptcy)? 3. When should I first contact a lawyer? With nothing being over 30 days at this point, it seems early, but I would project that, without greatly additional income, we will be at the 90 days overdue stage in about four months.

A. What you can exempt depends on which state you live in, since many states either offer the option of, or require the use of, state exemption schemes. During the Chapter 13 Plan, you keep all of your assets, but cannot sell them without approval. Only in a Chapter 7 do you have to worry about losing non-exempt assets. The Chapter 13 Plan payments are determined based on your non-exempt assets and your excess income (over expenses). The standard is that creditors can't be treated worse in a Chapter 13 than they would be in a Chapter 7. It is up to the Court to approve your proposed Plan. Normally the Trustee will also comment on it--if the Trustee signs off, the Court will rubber stamp approval. The creditors have no say in the Plan terms. Contact a lawyer now--that way, you can plan for what needs to be done and lay out the parameters of the Plan. You may also consider whether a Chapter 7 would be better for you.

Ask Edwards a Finance Question

Other Questions:

Purchasing claims from bankruptcy estate .

Could anyone direct me to some caselaw on the effect of purchasing claims in bankruptcy, particularly the following two aspects: A and B have a contract. A breaches contract, and breach forces B into bankruptcy. C purchases B's breach claim ...

...

Is filing IRS income tax Form 1040 voluntary? It's so confusing. So many web sites nowadays say income tax is voluntary like www.AllAboutFreedom.net ? Even former IRS agents are saying that it is voluntary: http://www.allaboutfreedom.net/...

NC Income Tax ? My information is that only the first $5,000 of a pension from a "foreign" govt entity is not taxable. These types of details should be checked by everyone individually.-Recently talked with a military retiree who said his ent...

Could someone tell me if debt to a lawyer for legal services is discharged when one files for bankruptcy?The debt to a lawyer is like any other debt. If it is unsecured and if the BK is filed and conducted properly, and if the BK proceeds to a ...

Edwards Finance Menu

Ask a Question
About Us / Me
Contact Me
Privacy Policy

Sitemap

My Favorite Sites

PFBlog
Google Finance
Yahoo Finance
Motley Fool
Nveille's Financial Blog
AllFinanceMatters
Free Money Finance
2MillionBlog
The Terror Finance blog

Q&A Subjects