Archive for December, 2013

Don’t Get Your Home Towed

Monday, December 16th, 2013
article  by admin

The US Constitution grants Congress the power to establish uniform laws on Bankruptcy. Our bankruptcy law is a Federal law administered by the US courts.

But, does that make it the same from state to state? It certainly does not. Although the main framework of the law applies across the country, the specifics of many provisions vary greatly from state to state and even from District to District within a state.

Each court seems to have its share of local customs. These can include the following:
1. specifics for how the general bankruptcy law is interpreted;
2. what the role of the trustee is in the bankruptcy process is; and
3. how the US Bankruptcy rules are actually administered.

Many districts have their own form of Chapter 13 plan. The rule here is obvious: if you’re going to file bankruptcy, hire someone in your area who knows the local customs. It’s far easier to walk into a bankruptcy hearing (even the first meeting of creditors) with someone that knows the bankruptcy trustee and is familiar with him, then to go into the hearing with a representative who, like you, has never been there before.

Don’t get home-towed: hire local counsel.

Carolyn Secor is a Clearwater bankruptcy attorney and Clearwater foreclosure attorney serving Palm Harbor, New Port Richey, Oldsmar, Tarpon Springs, Seminole, St. Petersburg and the Tampa Bay area.

If you would like more information on our practice, please consult our website at:

www.bankruptcyfortampa.com
or call (727) 254-1704.

Bankruptcy and Student Loans

Monday, December 2nd, 2013
article in BLN by admin

Chapter 7 can be overlooked as an option for dealing with student loans, particularly if you have assets. The Chapter 7 Trustee will gather and liquidate all non-exempt assets and distribute them to creditors, including student loan creditors who file claims. One small advantage of a Chapter 7 is that, due to the logistics of administration, even a small Chapter 7 case may be kept open for a year or two just to administer just a few thousand dollars. Even though you receive a discharge after about four months, the case is kept open during administration and, during this period, the automatic stay remains in effect, protecting you from collection actions.

Chapter 13 is the chapter most often chosen for dealing with student loan cases, for several reasons:

1. Five Year Stop of Collection Activities (Including Garnishment): A Chapter 13 Plan can last for 5 years, during which time the automatic stay–which prohibits all attempts from creditors to collect loans from you or your assets–is in effect and creditors cannot engage in collection activities. This means that they cannot send bills or letters, sue, garnish, attach, or take any collection efforts against you during this five-year period.

2. Disposable Income Plan: Under a Chapter 13 case, you are required to pay “disposable income”–that is, net income left after payroll deductions, rent or mortgage payments, car payments, food, utilities, insurance, etc.–towards the Chapter 13 repayment plan. Where there is very little disposable income (as is the case for many of my clients), creditors receive very little in the way of payments. Since student loans do not have to be paid in full through the Chapter 13 Plan, so long as you pay what little is left from your paycheck after paying your living expenses for 5 years, the student loan hounds are kept from the door for the duration of the Plan.

3. Co-Debtor Stay: Under certain circumstances, collections against a co-signer or guarantor of “consumer debt” are also stopped, by the “Co-Debtor Stay” of Section 1301 of the Bankruptcy Code.

4. “Perpetual Chapter 13″: Upon the completion of a Chapter 13 and the receipt of a discharge (or even if there is no discharge), you can turn around and file a brand new Chapter 13, with a brand new automatic stay, and another 5 years during which time the student loan creditor cannot call, sue, garnish or attach. This is a very common procedure to deal with student loan debt. We call it a “perpetual Chapter 13,” filing a new case every five years to allow you to survive.

Chapter 11 offers all of the advantages of a Chapter 13 (except for the co-debtor stay) with the addition of being able to extend the repayment term for student loans for up to 20 or 30 years, instead of the maximum of 5 that Chapter 13 offers. It also lets people who can’t qualify for a Chapter 13 because of the amount of their debt to protect themselves from student loan creditors. A Chapter 13 debtor can’t have more than $383,175 in unsecured debt, or more than $1,149,525 in secured debt. What are the disadvantages? Cost, for one. The legal fees for a typical individual Chapter 11 case are much higher than for a Chapter 13.

Carolyn Secor is a Clearwater bankruptcy attorney and Clearwater foreclosure attorney serving Palm Harbor, New Port Richey, Oldsmar, Tarpon Springs, Seminole, St. Petersburg and the Tampa Bay area.

If you would like more information on our practice, please consult our website at:

www.bankruptcyfortampa.com
or call (727) 254-1704.