Peter Goldstein

Surrender House In Chapter 13? All The Important Facts & Details

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In this article, we’ll discuss the important topic of: “Surrender House in chapter 13”

When you file a case in bankruptcy, you file the case under your convenience chapter, either 7 or 13. In chapter 13 bankruptcy, most people try to save their house by paying a monthly amount against your assets and properties. But there can be instances when you feel that selling off or surrendering your properties (which includes your house) and assets is the best decision for you at the moment. 

In this article, we will discuss the various factors that may lead to such decisions and the procedure that should be followed to surrender the house. 

Surrender House In Chapter 13

There can be many reasons when you feel that surrendering your home to the mortgage company can solve some of your financial crisis. That seems to be a profitable option out. To answer it briefly, yes, you will be able to surrender your home to the mortgage company without facing any consequences if there is no reaffirmation agreement signed. 

However, suppose you sign the reaffirmation agreement with the Mortgage Company or creditor. In that case, you are in every way responsible for paying back the debt despite you filing a claim of bankruptcy. 

So, if you surrender your house under chapter 13 of bankruptcy, the creditor has every right to sue you for any deficiency after the property is sold out. There cannot be any discharge of this debt as there was a reaffirmation agreement signed. So before the bankruptcy is filed, attorneys often suggest their clients refrain from signing the document for their properties. 

Coming back to the reasons why do debtors decide to surrender their home. When your home’s mortgage payment is very high, and you can earn only enough to pay that off besides your living expenses, you may then consider surrendering the house and rent out a cheaper living space until the case is discharged and closed. When you do that, you can save for a substantial down payment on your new house. 

Another reason can be when the mortgage payments are high, and you will not have any savings as a backup for any emergency. And during the bankruptcy, there are significantly fewer chances of you getting another debt. So, surrendering your home is one smart decision you can take to save you from an overload of debt. 

Stages of surrendering a house

The entire process of surrendering your house under chapter 13 of bankruptcy is different in different jurisdictions. It is a process of deciding on a new payment plan that can remove the mortgage and all debts that should have paid earlier. If none of the stakeholders’ object to the surrender, then the court will approve the new plan. 

  • Before Confirmation

There can be situations where creditors may disagree with the immediate foreclosure as it involves expenses to buy, maintain, and sell the property. This is will be the homeowners responsible for the property tax, maintenance of the property, home association dues until there is a handover of the property. 

To avoid that, most debtors add a special provision in their chapter 13 bankruptcy, which allows the debtors to transfer ownership automatically to lenders once the bankruptcy court confirms. And if no parties object, the court can close by ensuring title transfer to the creditors, without a need for foreclosure. 

  • After Confirmation

When the plan is confirmed, it becomes a contract. In a few cases, after the confirmation, the courts allow you to surrender the property. There have been instances where the courts made the debtors lose their right to offer even after confirmation. In such cases, you can dismiss the Chapter 13 and file a new claim. 

Surrendering House in chapter 7

When you realize that your mortgage amount is much more than the house’s worth, or you cannot afford to pay the mortgage amount, or you no longer need the house, you can surrender the house under chapter 7 bankruptcy. You will have to mention it to the court and creditors if you submit your bankruptcy papers if you wish to keep or give away any secured debts like a home or car. 

If you agree to put your house as collateral, you give your creditor ownership of the house. If you fail to pay the mortgage, the creditors have the authority to foreclose. The house will be sold in an auction, and the amount is used to pay the home loan. 

However, you will have to inform the court and lenders while filing up the Bankruptcy form. You will have to mention the creditor’s name, address, and tick on the option “Surrender the property.

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Final Thoughts

Throughout this article, we have mentioned the challenges of surrendering your house under Chapter 7 and Chapter 13. There are multiple clauses involved which you need to consider while filing a bankruptcy case. Surrendering your home is often a result of high mortgage values and high rents. This results in a series of inconveniences and surrendering the house can take off some of that load. 

Video

Here is a practical “Surrender House In Chapter 13” video that briefly explaines whether or not you can surrender your house during Chapter 13. 

How Is A Home Value Determined In Bankruptcy? Important Facts & Details

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How is a home value determined in Bankruptcy

In this article, we’ll discuss the important topic of: “How is a home value determined in Bankruptcy?”

Can I save my house even if I file for Bankruptcy? The most frequently asked question. It is essential to find out your home’s actual worth in both Chapter 7 and Chapter 13 Bankruptcy. In a few cases, knowing your home’s real value can decide whether you can keep the house or strip off some of your mortgage values. 

The forms you fill while filing a case on Bankruptcy are called schedules, which have the list of your assets, including land and home. You must mention the correct value of all the properties you have. In this article, we are about to find out how to determine the actual cost of a home and also why it is essential. 

How Is A Home Value Determined In Bankruptcy?

Before we discuss the ways of evaluating the true worth of your home or property, it is essential to know why it is even required. The most important reason is the exemptions you can claim in your home. You need to make sure the equity you have in your property is covered if you file a Chapter & Bankruptcy. 

The next reason is that if you can determine your home’s actual value, you can strip off lower of second mortgages in Chapter 13 bankruptcy. For instance, if your home’s net worth is less than the first mortgage, you can request the court to discharge the second mortgage lien. 

Another crucial reason is that you will have to put forward the true worth of all your properties along with your home on the bankruptcy schedules in court. 

Ways of evaluating the home value

It is not very difficult to determine the market price of your house. Here we have listed a few such ways of finding the true worth of your home. 

  • Official Appraisal

This is the most authentic and the most expensive way. In case of most Bankruptcy, an official/formal appraisal means that you are hiring a real estate person who has the license to come home, take a look at all the aspects, inspect the area for valuation, and then give a report. 

This report is brought to indicate your property’s fair price and is accepted in the bankruptcy courts. The process can cost quite heavily. The appraisal report should be as recent as possible, as fluctuations can influence the market’s market value. 

  • Market Analysis

This is a relatively less expensive process. When a licensed real-estate realtor visits your house, they evaluate the current price and compare it with the recently sold homes and the cost of current listings in the area. 

This will give you a fair idea in which you can sell the house. However, it is less costly than official approval and also less influential. 

  • Local Listing Comparison

This is somewhat simpler and can be done by you. As the name suggests, you can compare all the local listings in your area with your house. You have to consider the house’s current situation and what your neighbor has sold the house for with these conditions. 

This is the least effective method as per the bankruptcy court. However, it is useful under two situations, if you wish to surrender the property or if your mortgage is way above your home’s value. 

  • Property Tax Assessment

This is one method you can avoid to evaluate your house’s worth. Most bankruptcy courts do not consider the value which is provided by a property tax appraiser. They do not consider fair market value. Hence, they cannot be used in Bankruptcy. 

How much equity can I have in my home and still file chapter 7?

To explain simply, you cannot have a lot of equity in your homestead while filing a case of bankruptcy under chapter 7. The trustees will evaluate any non-exempt property you own, if any. And if available, that will be sold to pay back some debt to the creditors. 

What is equity? If your house’s total value is more than the mortgage, property liens, then it is considered that you have equity. Often home equity is said to be an asset.

Under chapter 7 in Bankruptcy, the trustees appointed have all the right to sell all your non-exempt properties, including your home, to reduce the dues with creditors. 

However, if you do not have enough equity or save the equity using the exemption, the trustees can decide not to sell the property. In a lot of states, you can protect some equity of your home.

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Final Thoughts

We hope you have understood the importance of evaluating the actual value of the properties and assets in Bankruptcy. It is often seen that many lose their home due to a lack of correct information and evaluation. The equity in your home determines whether or not you get to keep the house. 

Video

Here is a video clip explaining the important topic of “How Is A Home Value Determined In Bankruptcy?”

When Filing Bankruptcy, When Does Garnishment Stop? Important Facts & Details

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When filing bankruptcy, when does garnishment stop

In this article, we’ll discuss the important topic of: “When Filing Bankruptcy, When Does Garnishment Stop?”

Before we begin, lets us find out what garnishment is? Also known as wage garnishment, is the process of deducing the extra amount from an employee’s paycheck to pay the employee’s debts to any 3rd party or organization. This is a legal procedure in which the court, together with the employer or, in this case, the creditor, decides to pay a certain amount from the employee’s salary to overcome the unpaid dues. 

According to federal law, no employer can fire an employee not to process the garnishment payment. Garnishment payments are such that it usually clears defaulted student loans, unpaid taxes, child support payments, etc. 

In this article, we are about to find out the process of stopping garnishment in bankruptcy. 

When Filing Bankruptcy, When Does Garnishment Stop?

Garnishment is nothing but another type of debt collection procedure. So, when you file bankruptcy, as per the court orders, there is an automatic stay on all debt collection in most cases. In chapter 7 bankruptcy, the garnishment can stop temporarily. However, there is a limit to how much the employer can garnish each month from the employer. The debtor also can save some amount by the exemption. 

When a debtor files a bankruptcy claim, the court protects the debtors put putting an immediate stay. Hence the garnishment also stops immediately after filing bankruptcy. However, there are a few exceptions to this too. 

A creditor, on the other hand, can ask the court to remove the automatic stay. The court can decide whether or not to lift the stay if it falls under the categories like the creditors will suffer a massive loss until the case is closed or the creditor has already got the debt secured by a house or car. 

Steps to stop wage garnishment

When you file a bankruptcy case, you will have to provide the court the list of your creditors and the amount due. The court will then send the bankruptcy notification to all the creditors. 

Here the steps in details –

  • Filing your bankruptcy

Once you submit your petition, the wage garnishments will stop immediately. However, practically, the wage garnishment stops only when the creditors submit all the necessary documents to the employer. For instance, if you file a petition just a day before the paycheck for this particular month, the garnishment will continue, as the payroll must have started. You will get the amount back. 

  • Talk to the creditors and their attorneys

The next step is to inform the creditor and their attorney. However, they must already be notified by the court about your bankruptcy. You can talk to them and tell them about the case number. Now it will be your creditor’s responsibility to speak with your employer to stop the garnishment on priority. Make sure you have all the details handy before you make that call. 

  • Inform the Sheriff office

It will be a good idea to keep the sheriff’s office informed if your wage garnishment involves them. You can also share with them all the details of your bankruptcy. 

  • Inform the Employer/Payroll office

Your Employer will demand a letter from either the court, the creditor, or the sheriff department to stop the garnishment. You will have to understand that the employers are working as per the orders of the state court. So only an official statement will stop the garnishment process. 

This will prevent them from going afoul against the state. But this also means that you will have to continually remind the stakeholders that are the creditor attorney and the employer to stop the garnishment urgently before the next pay cycle. 

How long does it take to get garnished wages back?

There can be two scenarios of getting back the garnished wages. One is pre-petition garnishment, and the other is post-petition garnishment. In pre-petition garnishment, in a few cases, you may or may not be able to get back some of your garnished wages. If you have an exemption, you may be entitled to get some of your money back under the condition that you have filed the bankruptcy after 90 days of your garnishment. 

If you have already filed a case of bankruptcy and informed the creditor, attorney, employer, and despite that, your paycheck is still getting garnished, then you need to look deeper. At times it can be bad timing. For instance, if you have filed the case just a day before a paycheck for that particular month, the wage can be garnished as the process of payroll must have already started. You can inform the creditor, asking to file a refund. And even after all this, the employer is still garnishing your wages, and you can notify the court of not following the order of automatic stay. This means that the court can sue them for contempt of court. 

The creditors usually take up to 90 days to refund the garnished amount. 

Final Thoughts

Going through the garnishment of wages is tough. It can be challenging to live with garnishment and have a decent standard of living. You will not be allowed any loan during this period. You can get temporary relief by filing a case of bankruptcy. It gives you an option to start new and fresh. 

Video

Check out this video below for more important info on “When Filing Bankruptcy, When Does Garnishment Stop”  

Can I Sell My House While in Chapter 13? All The Important Facts & Details

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Can I Sell My House While in Chapter 13

In this article, we’ll discuss the important topic of: “Can I Sell My House While in Chapter 13?”

Can I sell my properties to get an early discharge from bankruptcy? These questions can be answered with a simple yes. When we discuss chapter 13 bankruptcy, we come across various advantages and disadvantages as it gives the debtors another opportunity to come out of bad debts. It provides the debtors an agreeable period of 3-5 years of repayment. But for some, this can be a long term commitment. What if someone wants to make other financial decisions during this period, like selling your house or buying a new property? 

In this article, we will talk about the opportunities for selling a house during chapter 13 bankruptcy. 

Can I Sell My House While in Chapter 13?

Yes, you can. However, the approval of selling of the property depends independently on the bankruptcy court. The reason being, when you submit a case of bankruptcy in court, all your properties then come under the orders of the bankruptcy court. When you decide on a listing agreement with a real estate agent, your contract can mention the bankruptcy court’s approval for sale to happen. If there are any proceedings that you are eligible to receive, the trustees will give you. 

So, to sum up, yes, you can sell your house during Chapter 13 bankruptcy with the help of your lawyer. You must be extra cautious before taking any step that may go against you during the sale and ensure that the court approves the deal. 

Procedure to Sell Your House

There are a few simple steps that involve selling your home during chapter 13 bankruptcy. Inform everyone involved early. No matter in which state of chapter 13 bankruptcy you are in, either it is right in the middle of the repayment plan or already towards the end, you need to inform your attorney immediately once you decide to sell your house. Your lawyer will need time to notify the bankruptcy court and gather numerous paperwork and approvals required. 

You must also inform your real estate agent and the buyer about chapter 23 bankruptcy, as most people tend to avoid such houses under bankruptcy. Lawyers usually take 30-45 days to come in terms of negotiation with the creditors and trustees. 

Motion to Sell

This is a critical piece of paperwork that is essential if you sell your house in chapter 13 bankruptcy. This documentation has all the details of your home, i.e., the house’s selling price, the house’s net worth and appraisal of the house to validate the net worth, and a suggested proposal of the distribution of amount after the sale. Once the trustees approve this document, you can sell the house. 

Statement of Sale

Towards the end of the sale, you will have to provide the lawyer with a copy of this sale statement. This document contains the house’s final price, deductions, the equity left behind, and the amount recovered from the sale. You will have to make a few payments that the trustees have ordered at the motion to sell. 

Discharge of Debt

If this sell can pay off most of your debts, you will likely get discharged from chapter 13 bankruptcy soon after. The bankruptcy court will sign the discharge form provided by trustees and will hand over this final document. This will indicate that you are free of bankruptcy. 

Chapter 13 And Home Equity

Home equity is the balance of the home’s current value minus the mortgage loan or other debts. It is also that part of your property that genuinely belongs to you. If the mortgage value is higher than your current home price, then you do not have equity on your property. 

Now, how is home equity related to chapter 13 bankruptcy? In chapter 13 bankruptcy, you can safeguard your home equity if it is higher than your homestead exemption. Chapter 13 is an easy adjustable debt repayment method; it tends to protect home equity than Chapter 7 better. 

When you file for bankruptcy under chapter 13, you will have to accommodate the creditor’s best interest. And to do so, you will have to pay the unsecured creditors the minimum amount they would have received if there was a chapter 7 bankruptcy case filed. The reason being, if this were a case of chapter 7 bankruptcy, the trustees would have sold your house along with your nonexempt equity to pay to your creditors. And thus to keep your home, you must pay an amount similar to that. 

In general scenarios, a debtor files a case of chapter 13 bankruptcy when he wishes to keep his house and not sell it. However, the law does allow you to do otherwise. 

Final Thoughts

So, Can I Sell My House While in Chapter 13?

Chapter 13 bankruptcy is usually preferred over chapter 7 as it is a consumer favoring repayment plan. In case of both selling and keeping the properties, chapter 13 bankruptcy gives your multiple options. All you need to do is consult a reasonable bankruptcy attorney and decide on the process of discharge.

Related Articles: Can an Estate File Bankruptcy?

Can I Wear Jeans to My 341 Meeting? Important Facts & Details

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Can I Wear Jeans to My 341 Meeting?

In this article, we’ll discuss the important topic of: “Can I Wear Jeans to My 341 Meeting?”

What you wear and your overall appearance make an impression on someone you are meeting for the first time, and when it’s for as crucial an occasion as a court proceeding, you have to be even more careful. 

Can I wear jeans to my 341 meetings? Since it is the question we have been confronted with often after the bankruptcy filing, it is essential first to understand the subject of the discussion to decide what’s most ideal for wearing. 341 meeting is regarded as the meeting of creditors; all debtors are bound to attend as part of the bankruptcy proceeding. This meeting is a mandate for all those who have filed for bankruptcy. 

Can I Wear Jeans to My 341 Meetings?

All those who have filed for bankruptcy must know and understand that this is a protocol established by law, that 341 meeting is not to be taken lightly. One must understand the gravity of a meeting like this and carefully choose all their actions and the look they want to own. 

The meeting is assumed to be less formal than a court hearing. It takes place in an office or around a conference table, but that doesn’t give us the liberty of wearing anything up to our taste. One cannot assume that their ripped jeans or a concert t-shirt will work to serve the purpose. However, wearing a decent pair of jeans is not such a huge deal as long as you present yourself with honesty on such occasions. 

Although there is no established norm for courtroom dressing, each federal court has its code of dress. Courts expect visitors and parties to wear formal business attire. The formal attire would mostly mean a collared shirt, a decent pair of trousers, and shoes for men. For women, it means a top or a pantsuit and low-heel shoes. 

Whenever you attend a meeting like this, your attorney will advise you to dress more conservatively and avoid any flashy clothing that grabs unnecessary attention.   

The Exact Dress Code You Should Follow

Just advising clients or cases involved people to dress more conservatively or a certain way may not explain what to wear exactly. So here is a list of clothing (for both men and women) you have to refrain from wearing as per the concerned court:

  • Hoodies 
  • T-shirts 
  • Athletic wear or athletic shoes
  • Tank tops
  • Hats 
  • Shorts 
  • Ripped jeans

What Should You Expect?

Attorneys mostly prepare clients beforehand for a meeting like this, tell them what could be the possible atmosphere of a federal courtroom and how to respond to that. 

  • There will be other case filers with you
  • The meeting will last about an hour
  • Wearing a fancy suit to the court might cause the trustee to take queer notice of you
  • Being plain and honest in your answers to the trustee might help your case

What You Should Avoid?

While going for this meeting, avoid flaunting possessions, even the basic ones you have, and that you would otherwise. Possessions you must leave home:

  • Fur-trimmed jacket
  • Diamond solitaire or any expensive piece of jewelry
  • Designer accessories like belt, shoes, and handbags 

Avoid showing off, as it might weaken your case. 

Questions You Should Expect from The Trustee Of Your Case

  • Essential particulars related to your identity that include your current address and photo id.
  • If your filled form has a list of all your assets and creditors
  • If you signed your bankruptcy form
  • If you have filed before this 

Final Tips for Your Meeting Look

  • Expensive jewelry to strictly avoid
  • A large amount of cash not to be carried in wallets 
  • What you wear should match what your petition says 
  • A decent blue pair of jeans would be just right

Are Jeans and a regular t-shirt an appropriate bunch of clothing for this meeting?

Meetings with the creditors are generally more casual than hearings in the court. The atmosphere is light, while the questioning can be tense, sometimes depending upon how strong your case is. 

Which could be a few additional questions asked in the meeting?

Few additional questions could include details of any property you own or rent, your monthly income and job, and even recent tax returns. These questions aren’t very often to arise, but one must still be prepared to answer.

Summary

Can I wear jeans to my 341 meetings? This short piece is an attempt to answer this question and explain what should be a valid code of dressing for a 341 meeting and that a decent pair of jeans does not, after all, put you in a very questionable state in front of your trustee or group of creditors in the room as long as you have shown the courage, to be honest through the session. 

Do Chapter 13 Payments Have to Be Payroll Deducted? Important Facts & Details

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Do Chapter 13 Payments Have to Be Payroll Deducted?

In this article, we’ll discuss the important topic of: “Do Chapter 13 Payments Have to Be Payroll Deducted?”

What is a payment deduction order? Is it mandatory in chapter 13? What are the alternatives to payroll deduction? There have been multiple questions surrounding the payment method in Chapter 13 bankruptcy, and it seems to be essential to know the appropriate method. 

In chapter 13, the debtors make repayment of debts for 3-5 years in monthly installments. Ideally, the debtors make a monthly payment to the trustees, who then forward the amount to the creditors. There can be two ways of sending the amount to the trustees. One is by directly submitting a cheque to the trustees. Another method is applicable only for employable debtors who have a regular income source, and the amount to be paid is directly debited from the payroll. 

In this article, we are going to discuss the modes of debt repayment and the procedure involved.

Do Chapter 13 Payments Have to Be Payroll Deducted?

To better understand this, we must realize how payment deduction order works. However, it is mandatory that in chapter 13, the method of repayment of debts is by payroll deduction, if not ordered by the court or agreed upon by trustees. It must be effective once the court gives orders. There is no need for any motion in payroll deduction. 

The debtors’ lawyer must submit a completed payroll deduction order (Local Form 3070- 1(a)) at the time of submission of the plan of overcoming bankruptcy if the debtor received regular payments from employment. If there are joint debtors and wish to have partial payment reduction from each account, the attorney needs to submit that different payroll deduction plans for individual debtors. 

However, this is not the only way of repayment if there are legitimate reasons for not paying through payroll deductions. Let us discuss the exceptions.

Exceptions to Payroll Order Requirements

There can be a few circumstances when the payroll deduction can be omitted. 

No Fixed Wages or Optional Payment

When the debtor’s income is from an employer that is not permanent, for instance, income from self-employment, rent, and retirement, the lawyer does not need to submit the payroll deduction order. However, the attorney has to mention this in court in the first hearing itself. 

Rotational Job Change and Seasonal Payment

When the debtor has a valid point for not opting to payroll deductions, the debtor’s lawyers must get approval from trustees. If the trustees disagree, you will have to approach the court to excuse yourself from the payment. The trustees may agree that there is no fixed and sufficient wage to be included in the payment plan. If the debtor only depends on tips from the job to meet the need or the employer is small and has a hand-written cheque still, the debtor can be excused from the payroll deduction plan. 

Contract-Based Jobs

If the debtor jumps from one job to another and the payment fluctuates. Or the job is mostly seasonal, and depending on the periods the wage changes every week, in such scenarios, the debtor can request the court to opt-out of the payroll deduction order. 

This can be further discussed with the trustees at the 341 meetings with creditors and debtors and decide whether or not to apologize. If the trustees approve that the debtor can be excused, but will need to make an alternate payment through automatic bank draft. And if the trustees disagree with the debtors, the debtor attorney can file a motion in court and request a waiver. 

What Happens After Chapter 13 Is Paid Off?

After you have completed the repayment of all debts within the period, you will likely get a discharge from bankruptcy. In the discharge document, all the balance of the remaining debts will be wiped out. In most chapter 13 bankruptcy case, most nonpriority, unsecured debts are likely to get discharged. 

In chapter 13 bankruptcy, you can safely keep your assets and properties by paying a monthly amount. Student loans are, however, an exception, which you will have to bear responsibility. Some very common types of nonpriority yet unsecured debts are medical bills, credit card loans, old unsettled taxes, etc. After all the debts have been cleared out, you will no longer be receiving any notification from either the court or the creditors. 

Related Articles: How Does Bankruptcy Affect Your Job And Future Credit?

Final Thoughts

It is not a mandate that you will have to make the payment under the payroll deduct plan in a nutshell. The court does consider exceptional circumstances and the debtor’s income statement before making the decision. But if you meet all the requirements of a regular paid employee, you cannot opt-out of the plan as per the Federal law. 

Getting A Job After Filing Chapter 7 – All The Important Facts & Details

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Getting A Job After Filing Chapter 7

In this article, we’ll discuss the important topic of: “Getting A Job After Filing Chapter 7”

Wondering if filing for bankruptcy, dismiss you from your job? Or will it restrict on getting a new job? To overcome default, you will need to have a steady income source. And in such situations, if there are questions surrounding bankruptcy, it is evident that it will make your nervous. 

But before you file for bankruptcy, you need to understand the difference between Chapter 7 and Chapter 13 bankruptcy. But according to the US constitution, bankruptcy is a common stress reliever for every citizen in the country under massive debts. 

Let us briefly discuss the various aspects of your job and career despite filing a chapter 7 bankruptcy. 

Getting A Job After Filing Chapter 7

The most common fear amongst individuals before filing a case of bankruptcy is will this affects their present or future job opportunities. But according to the US constitution, it is highly unlikely that it will affect your job. And if you face any such issues, you have every right to bring them to court. 

If you already have a job and your employer comes to know that you will file bankruptcy, it should not affect his behavior. He has no right to either fire you or give you a lesser salary, or even demote you and relieve you from your current responsibilities. Under no circumstances can an employee be harassed for filing a case of bankruptcy. 

Now, if you are looking for a new job, the employer may find out about your bankruptcy from the background check and your social security number, if given permission. But that should not be a reason for not offering you a job. 

However, if you file a Chapter 7 bankruptcy and then get a new job, you will have to inform your attorney and the court. As in Chapter 7 bankruptcy, you are likely to be relieved of a few or more disposable expenses to get a discharge. But after the court and trustees find out about your new income source, you are most likely to be forced to change to Chapter 13 bankruptcy, as you can now afford the repayment of debts. 

Impact of Bankruptcy On Government and Private Sector Jobs

There are two types of employment systems in the country. And they have different employment rules and management. However, Section 525 of the Federal Law, which is also the bankruptcy code, protects the debtors from discrimination. Let us find out their behavior towards bankruptcy. 

Government or Public Sector Organizations

Any government body cannot revoke, refuse or suspend the renewal of a license, grants, or any permit to any citizen who has filed a bankruptcy case. In terms of employment, the government strictly prohibits any discrimination in terms of employment opportunities. There can be a thorough investigation and background checks in government organizations like in national security or crime branch before your employment. And the employer can find out about your bankruptcy. But that does not stand as a valid reason not to employ you. 

Private Sector Organizations

In the private sector, the employers do not have the authority to remove you from an existing position or not offer you a promotion or job opportunity solely based on your credit scores. When you file a chapter 7 bankruptcy, it stays in your credit statement for ten years, and in the case of chapter 13 bankruptcy, it lasts for seven years. However, in private industries where there are involvement and management of finances in your job role, there can be denial from the employer, as it paints a gloomy picture. 

Do Bankruptcies Show Up On Background Checks?

Yes, it does. Bankruptcy is a public record subject to viewing if permitted by the concerned person. There are two ways by which someone can find out about your bankruptcy. One by enquiring at the federal courthouse at the particular district where you have submitted your case. And another way is by logging into the PACER account with appropriate credentials. PACER keeps the record of all bankruptcy-related documents. Another insignificant method is when you inform someone about your bankruptcy. 

Usually, employers check for criminal records and, if necessary for the job, can look up credit records. When it is a genuine and understandable circumstance like a medical emergency, divorce, etc. that has led you to file a bankruptcy case, most organizations will consider. 

Final Thoughts

How Easy Is It Getting A Job After Filing Chapter 7?

To explain briefly, there cannot be any hindrance or resistance of employment or job opportunities for a person who has filed a chapter 7 bankruptcy. Irrespective of which stage of bankruptcy you are in, there is no restriction of career growth to a debtor who has filed for bankruptcy or to someone who is associated with another bankrupt individual.

The bankruptcy slowly becomes insignificant with years, which means if it is old and toward the end of discharge, it can have no impact on your job. 

Is Bankruptcy Public Record? All The Important Facts & Details

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Is Bankruptcy Public Record?

In this article, we’ll discuss the important topic of: “Is Bankruptcy Public Record?”

Before we understand ‘bankruptcy’ is a public record or not, it is essential first to know what public records define. As our society and system have established, the public record is anything that we have simple access to, through a government entity of court without getting authorization to do so. Real property information is the most common example of being part of a public record. Ownership of our house is, in fact, part of the public record. It’s one of the several simple examples used to define a norm like this.

Is Bankruptcy Public Record?

While there’s a huge stigma attached to bankruptcy, the following content may prove you otherwise or side with you. Read further to understand better! 

One may feel too overwhelmed at sharing a piece of information as sensitive as this with his friends or colleagues. What if they never find out? It’s a common myth that people might find out about bankruptcy cases on their own; however, this is not the case. No one would know unless you choose to tell them in good faith. It is undoubtedly true that bankruptcy is listed on a public database for people to access. 

Still, there’s not even a bleak possibility that your family might stumble upon; it’s mostly your creditors that are actively searching for details of you, your last transaction, and various other things.  

The likeability of a local newspaper publishing about bankruptcy is relatively low; however, a financial paper might. For an average person/your neighbor/recent contacts, obtaining this kind of bankruptcy information is quite hard. The only people who will know it are the people involved in the process, including your attorneys and financial institutions. You will find all your filings with the federal court where you have filed. Such intimate information can only be found out through PACER, where you will have to create an account and pay for obtaining such records. 

Who Can See and Read About Your Case?

The only people ever involved with your case will be able to find out about the case filing. These people include: 

  • Financial institutions: An institution you have filed the lawsuit with 
  • Creditors: People that are aggressively looking for closure on last transactions with you 
  • Attorney: It’s a must for attorneys to have access to information about your case

Are The Bankruptcy Records Ever Sealed?

In rare cases, it so happens that the bankruptcy records are sealed. It is in case of these records containing intensely personal information which includes: 

  • Ownership information
  • Health records
  • Any criminal details
  • Information related to minors
  • Massive trade secrets 
  • Dishonesty with a debtor

It doesn’t happen often but is a distant possibility. 

What Is the Expected Impact of Bankruptcy Records?

Some of the common effects one may experience during this phase can be too overwhelming, but one has to stay strong, even amid the public eye being set on him. 

  • A person with an ulterior motive might use this information wrongly
  • Because of the financial history being made available, a genuinely fresh start may take some time to shape
  • One may struggle with obtaining credit for a long time 
  • Future employment opportunities might be hampered

What All Constitutes Your Bankruptcy Listing as Part of the Public Record?

All the essentials related to your identity and particulars about your residence will be part of this record. 

  • Name 
  • Address 
  • The date the bankruptcy was filed
  • Occupation
  • Details of the official receiver of the case
  • Anyone has access to the register, but the only people looking into it will be your creditors

This is what makes up your bankruptcy filing is a public record. 

Things to Do While You Are Recovering from The Bankruptcy Phase

It is essential to see how someone has tried to stay calm through this time. While you are too overwhelmed with your current circumstance, it’s necessary to ensure a better tomorrow by being productive

  • Seek the help of a financial expert: After you recover completely, you should be able to make sound financial decisions 
  • Read and research: We must know the market and business to be successful
  • Consider your peers’ advice: It might speak of your best interest, and you never noticed

‘Is bankruptcy public record‘? We have often asked ourselves if some friend or a closed one has experienced a crisis like it. After reading it, we know at least where to feel strong and where to stay positive.

Is Bankruptcy Filing a Public Record?

It is very well the case that bankruptcy filing is a public record as it lays out all the intimate details of the involved person for the people to see. Them being part of a public record are open to public scrutiny wherever they go. 

Is Bankruptcy Listing Always There?

It is only there for some time; your listing will be taken off from the register after three months once you are discharged.

Summary

It isn’t hard anymore to answer the frequently asked question, ‘Is bankruptcy public record‘? After a fair understanding of the filing process, what risks and effects it involves, and the consequences, one can quickly know what to do in such a case. 

Is bankruptcy filing a public record? Does the question that’s often-confused or upset you, its time you research and try to understand why bankruptcy is categorized as a public record and base your argument with enough logic. 

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What If My Income Increases During Chapter 13? Important Facts & Details

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What If My Income Increases During Chapter 13?

In this article, we’ll discuss the important topic of: “What If My Income Increases During Chapter 13?”

Often users raise this question that if there is a change in my income source, can I close my bankruptcy early? In Chapter 13 bankruptcy, the debtor has to get a repayment plan approved from the court, under which he has to keep making payments for the next 3- 5 years. In such cases, debtors often try to close off the bankruptcy by raising their income. However, there is a procedure that needs to be followed once you get a raise in pay. 

As it is the debtor’s responsibility to complete the Chapter 13 bankruptcy, he is likely to inform the lawyers and the court about any change in the income. We are about to brief you about the procedures that one might follow once they get a raise in pay. 

What If My Income Increases During Chapter 13?

Before we talk about what happens to the chapter 13 bankruptcy repayment plan once there is a hike in salary, let us discuss what happens if we fail to inform our attorney, trustees, and court. It can be a very tempting circumstance to receive an extra income and not give away a significant portion of it as repayment. However, we must understand that you can be charged with severe consequences if the trustees find out about this raise. The court has every right to dismiss your bankruptcy midway, and you can land up exactly from where you began. 

Another significant consequence that the debtor may have to suffer is to pay a considerable fine, at times around $250,000, along with five years of imprisonment.

This happens if the trustees find out that the debtor has deliberately hidden the extra income source. Hence, we would suggest you be honest and report the changes to your attorney and trustees immediately. 

Effects of Income Raise On a Repayment Plan

The significant effect that the trustees and court can decide upon if you have a raise in income is to increase your repayment plan. Chapter 13 allows you to make a monthly installment of debts based on your income. The amount you pay as debt repayment is your income minus reasonable and qualified monthly expenses such as food, medicine, rent, etc. Thus a higher salary means that you will have an extra amount to add to the repayment plan. 

However, the repayment plan is revised by the trustees only when there is a massive jump of income and no increment on expenses. But if there is only a minor change and there is no considerable change in the disposable income, the trustees cannot make any changes. 

Tips and Tricks for Chapter 13

Chapter 13 bankruptcy can be challenging as it continues for 3-5 years. And there are a few tips we would like to suggest you overcome this phase quickly. 

Determine the period According to the Bankruptcy Abuse Prevention and Consumer Protection Act enacted in 2005; the debtor has to agree to a 60- month plan if their income is higher than the state’s median income level. And if the income is lower payment the state’s median level, then the debtor must choose a 36-month plan. However, they can also choose for 60 months. Now you will have to decide on the plan that is best suited for you. 

Classify Debts According to Priority

In chapter 13 bankruptcy, the debtor must understand each debt’s priority and make repayment plans accordingly. For instance, secured debts like the trustees’ fees are to be paid first. Secured debts do not allow partial payments unless you have filed a motion to lower the value of the amount that you owe. Many unsecured debts like child support, alimony, taxes, etc. are also on priority and need to be paid fully. The remaining types of debts are considered unsecured and can be paid over the agreed payment period. 

Identify Exemptions

An exception is an amount that is free from the creditors and bankruptcy court. When the exemption levels are lower than the equity, then you must include the equity value to the amount that needs to be paid to unsecured debts. You must decide whether you wish to claim the exemptions under the bankruptcy code or choose to claim exemptions under the state law. You must consult with your lawyer to determine the amount to be added to the disposable income.

Final Thoughts

So, What If My Income Increases During Chapter 13?

Since there is a provision to increase your income and stick to your earlier expenses, there can be a chance of early discharge. It can be quite disheartening for the debtor to have raised their income but will have to give away most of it as per the Federal law or Bankruptcy court. The debtor must accurately determine and identify the exemptions and set up a favorable period to complete the repayment plan without any inconvenience. 

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What If I Buy a Car While Under Chapter 13 Without Trustee Permission?

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What If I Buy a Car While Under Chapter 13 Without Trustee Permission?

In this article, we’ll discuss the important topic of: “What If I Buy a Car While Under Chapter 13 Without Trustee Permission?”

Chapter 13 bankruptcy is an extremely debt relieving tool, which is in a lot of sense better than Chapter 7 bankruptcy. Unlike in chapter 7 bankruptcy, it lasts longer, up to 3-5 years. It lasts longs to give the debtor a reasonable period to overcome the bad debts and come out of bankruptcy. 

Understand that the time duration is long, and there can be financial changes in your life during this period. Chapter 13 bankruptcy has the exact details of what needs to be done when such changes occur. Suppose your income grows significantly and changes your financial condition. In that case, you can either opt-out of bankruptcy voluntarily, close this case and file a new lawsuit, or you can convert the case to Chapter 7. 

But no matter what, you will have to keep your trustees, attorney, and the court involved in tiny decisions you take. In this article, we will further discuss what happens if you do not abide by the rules. 

What If I Buy a Car While Under Chapter 13 Without Trustee Permission?

Bankruptcy is very critical in terms of following the rules and laws. If you want to buy a car without informing the trustees, God forbid the trustees to find out about your recent purchase. The trustees have every right to ask you to surrender the vehicle, and they can also dismiss your bankruptcy, which will stay as incomplete.

Most lenders who usually do not run a credit check before lending you some amount but get a document signed, which says that you are not part of any bankruptcy right now. 

However, you can request your trustees to file a motion to get a car loan approved by the court, and then you can buy your car, even during bankruptcy. 

Consequences of Not Following the Rules of Bankruptcy

If you are found an offender of the law, there can be a series of consequences– 

Dismissal of The Bankruptcy Case

The bankruptcy court can decide to dismiss a case on its grounds or complaints from the trustees and creditors. The judge can choose to impose a ban on future filing of the bankruptcy case for the debtor for some time or even permanently in extreme cases. This is a common punishment for debtors who repeatedly fail to pay the creditors and file for dismissal. 

Denial of Discharge

When the bankruptcy court decides to dismiss your bankruptcy discharge, the creditors get the power to collect the debts again from you directly. The discharge of bankruptcy could have wiped out some of the debts that were over-burdening the debtors, but the denial of the discharge will make it difficult for the debtor to meet the needs. 

Other Consequences

The judge has the power to charge any concerned party contempt of court and can exercise power to impose restrictions. For example, if the creditors are found contempt of court, the judge can deny any further claims from the creditor and ensure to prohibit him from filing any claims in the future. Other significant consequences include unable to vote or travel outside of the country or apply for some job. 

How Can I Buy a Car While in Chapter 13?

Do you want to buy a new car during chapter 13 bankruptcy? Let us tell you that it is challenging yet possible. But for that, you will have to find out a lender who will agree to work with your despite you being inactive chapter 13 bankruptcy. By now, we already know that no one can get new debts while in Chapter 13, bankruptcy without the bankruptcy court’s permission. 

And to get permission, there will be a meeting with all creditors, trustees, and the debtor. The trustees can agree or not to your request for buying a new car, while your lawyer will try and convince the judge how important it is for you to get this new vehicle. To make the judge decide in your favor, you must present an acceptable reason to buy the new car in an active chapter 13 bankruptcy case. It usually takes 30-45 days to complete the process. 

Suppose you have figured out the proper proposed payment. In that case, the interest rates are reasonable, and the total amount is not too high; most bankruptcy courts approve the request if you do not have alternative transportation. 

Final Thoughts

It will be considered fraud if you do not inform your bankruptcy case’s trustees before buying a car. And that can also lead you to severe consequences as it also implies breaking the law. You can be tempted to take such a step, but this can lead you to a series of negative impacts, including being charged a hefty fine or even imprisonment. 

Here’s a video for more information on the subject “What If I Buy a Car While Under Chapter 13 Without Trustee Permission?”

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