Things You Can Keep During Bankruptcy


Evidently bankruptcy can be very depressing as it you stand a chance of losing all you have. It affects your credit and your spending. Your pride could be hurt but filing for bankruptcy is much better than being silent about it. You don’t necessarily lose all you have when you file for bankruptcy, tha is why it’s advised or as the law permits, you meet a bankruptcy counselor. Bankruptcy is in two forms. Chapter 7 and chapter 13.

Chapter 7:Chapter7-Bankruptcy-Provides-a-Fresh-Start

This is called liquidation or straight bankruptcy. In this type of bankruptcy, you assets are given to a trustee which is given a cash value of your assets and divides it amongst your debtors.

This kind of bankruptcy is called a no-asset bankruptcy, but according to some state laws, they are exemptions. Florida for example is called a “debtor’s paradise”.

Unlimited equity cash in your home. For instance, if your home cost $1 million dollars and you just have $100,000 remaining on the mortgage. The remaining $900,000 remains legally yours as far as you can prove that it’s your main residence.

Any car with a value less than $6,600. You are allowed to keep even two cars if the combined value is less than $6,600. You can even lease one out to help raise money to pay your debts.

Your passport. You are allowed to keep your passport, but however, you need a signature from your trustee before you embark on a journey overseas.

Chapter 13

chapter-13-bankruptcy-300x300This kind of bankruptcy is called a “reorganization”. This kind of bankruptcy is an interest – free debt repayment model. You are allowed to keep your assets based on how much you earn. Things like your home regardless of its value. For more information you can take help of chapter 13 bankruptcy lawyer dallas .

Your stock – in this kind of bankruptcy, you are allowed to keep your stocks. Personal belongings – you are also allowed to keep personal belongings like jewelry, clothing, etc with a combined value of $1000 or less.

 

Household Goods and Furnishings

Federal and state laws allow you to keep household goods and furniture. The exemption is about $11,525 with no item having a value of $550. This is because these items do not have high resale value and trustees don’t bother selling them to repay debtors.

Retirement assets

Your retirement funds are exempted too. Exemption includes pension, profit and stock bonus plans, your Individual Retirement Accounts (IRAs) is also exempted.

Evidently, declaring bankruptcy is not a terrible thing or the end of the tunnel. There is life after bankruptcy. Declaring bankruptcy gives you an opportunity to stand up on your feet when you have money troubles. All you need to do is comply with Federal and state laws, and you will find a good counselor who can help you through. The least length of time to keep the bankruptcy status is three years. This is done to be sure you are up on your feet.

How Divorce Decrees Factor Into Bankruptcy

The main issue in Chapter 13 cases dating from 2015 is to ascertain whether the provision in a divorce decree is a support provision or a property settlement provision. Such issues mostly pertain to Chapter 13 cases.

With Chapter 7 cases however, neither support nor property settlement obligations can be discharged in bankruptcy. So the real challenge of bankruptcy attorneys in Chapter 13 bankruptcy cases is to distinguish the appropriate divorce decree provision.

The court will look at different factors when trying to determine whether provision is a Property Settlement provision or a Support provision:

Labels in a Divorce Decree

While the court in a bankruptcy case may look beyond labels contained in divorce decrees so as to determine the real character of a provision, labels do actually matter. Things tend to be what they say they are.

Income Needs of Parties Involved

A bankruptcy court will examine to see whether the person receiving the settlement was in actual needs of the funds to meet their essential living expenses during the time when the decree was filed.

Analysis of Property Divided

A bankruptcy court will analyze and review property(s) divided before the divorce decree was entered and consider the kind of property divided. For instance, the division of funds from the sale of a yacht will probably be more in nature of a property settlement than the awarding of a 15-year-old van.

Are Obligations to Pay Terminated Upon the Emancipation of a Child or Remarriage?

If this is the case, provisions tend to be regarded as support payments.

Number of Payments

If payments will be lump sums or made over few large payments, this will be considered a property settlement. Small payments spread over lengthy periods of time will normally be deemed support.

Will a Divorce Decree Offer Protection from Any Creditors Should My Ex Partner file for Bankruptcy?It will not. If you are co-signatory with your ex-partner on a debt that was acquired while you both were still married, the creditor may require that debt repayment from you even if the divorce decree assigns the entire debt to your ex-partner. Your decree may consider other options in the event that your ex-partner defaults on loan obligations.

Divorce attorneys always pay detailed attention when the ex-partner of their client files for bankruptcy. Should a Chapter 7 case be entered, the divorce decree will generally be secure. However, in the event that the ex-spouse files for a Chapter 13 bankruptcy, then a Red Alert will be sounded. Important considerations should be made on how a proof of claim is entered and the deadlines to challenge plan confirmations as well as deadlines to object to discharging the divorce decree obligation. Getting advice from an experienced divorce attorney will put you in a position to determine which course of action to take.

Is A Joint Petition Bankruptcy A Good Idea

Overview

Several couples often decide to have joint accounts and open up credit cards with both of their names on it when they get married. In this way, their finances become linked such that any debt they acquire after their marriage becomes a joint responsibility. Situation may arise when the debts become too great to overcome that they may decide to file for joint bankruptcy.

Joint petition bankruptcy is a way to save time and money if you are legally married. By filing a single petition together with your spouse, all property, income, expenses and debt between you and your spouse will be disclosed.

All debts (individual and joint) owed by both spouses have to be listed in a joint petition bankruptcy. Although a joint bankruptcy can eliminate both of your dischargeable debts without having to file them separately, the type of debt and how they are owned (either individually or jointly) can affect if it is in your best interest.

All properties owned both jointly and individually by each spouse must also be disclosed such that all property becomes part of the joint bankruptcy. However, if the value of combined assets is more than the exemption available to you in bankruptcy, it can pose a potential problem.

As with every situation, there are pros and cons to a joint bankruptcy.

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PROS OF JOINT PETITION BANKRUPTCY

  1. SAVE MONEY ON FILING FEES

Because the bankruptcy filing fees are the same whether you file individually or jointly, you get to save money as you pay for only one filing fee instead of two. Furthermore, if you decide to take on an attorney, there is also a likelihood of saving a lot of money.

  1. SAVES TIME AND IS MORE EFFICIENT

Unlike individual bankruptcy filing where you have to not only provide extensive financial documentation/information but also have to attend several hearing with the bankruptcy trustee, joint

petition bankruptcy ensures efficiency as documents are only gathered once and hearings attended together.

  1. ALL DISCHARGEABLE DEBTS ARE ELIMINATED

When you file for joint bankruptcy, dischargeable debts owed by you and your spouse are wiped out but if only one spouse files, the non-filing spouse will still be responsible for his or her separate debt.

  1. BOTH SPOUSES ARE PROTECTED

Joint petition bankruptcy protects each spouse both at work and at home from debt collectors calling on them.

CONS OF JOINT PETITION BANKRUPTCY

  1. WHEN ONE SPOUSE OWNS TOO MUCH PROPERTY

If one spouse owns too much separate property, it may not be possible to exempt all of your combined assets in a joint bankruptcy.

  1. DAMAGES BOTH SPOUSES’ CREDIT SCORES

Joint bankruptcy has a damaging effect on both spouses’ credit scores

In conclusion, deciding if you and your spouse should proceed on a joint petition bankruptcy when faced with overwhelming debts should be taken only after due consultation with a skilled legal professional.