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Which Type Of Bankruptcy Should I File?

Which Type Of Bankruptcy Should I File?

You have several options when choosing which type of bankruptcy to file. For most consumers and even small business owners, those choices come down to a Chapter 7 or a Chapter 13 bankruptcy. While a free phone consultation with our firm can most easily help you determine which type of bankruptcy you should file, this short article will help you begin to understand the difference between Chapter 7 and Chapter 13.

Understanding The Types Of Bankruptcy

A basic understanding of a bankruptcy filing is helpful in determining your options. For starters, the primary difference between a Chapter 7 and a Chapter 13 is that in a Chapter 7 your debts are discharged over a very short period of time. In a Chapter 13, you agree to a Chapter 13 Plan which consists of monthly payments you will make over a course of three to five years.

When I discuss Chapter 7 with potential clients, I make sure they know that because Chapter 7 is a complete discharge of debt, you must qualify for Chapter 7. We analyze your income and assets to determine if you qualify for Chapter 7. If your income is too high or if you have too many assets—or equity in those assets—then you may not qualify for Chapter 7. Or, you may qualify for Chapter 7 but in such a way that you should be prepared to either turn over an asset or pay the unexempt equity to the Trustee. You will be well aware of any potential for this scenario before you file the bankruptcy.

Good News Regarding Choosing A Type Of Bankruptcy

The good news is that if you do not qualify for Chapter 7, you can almost always qualify for Chapter 13. In my view, Chapter 13 was created as a compromise for debtors. It’s simply not fair that if you don’t qualify for Chapter 7, you should not be entitled to any debt relief. As a result, Chapter 13 offers a different option. The compromise is that in Chapter 13 you commit to paying your creditors something—but not everything—over a three to five year period.

The Chapter 13 payment is often expressed as a percentage of your debt. In other words, in Chapter 13 you may be said to have a “10 Percent Plan”. This means you will pay approximately 10 percent of your unsecured debt over the five year Plan period. Upon the final payment, the remaining 90 percent of your debt will be discharged. While the Plan is expressed as a percentage, it is actually a function of your monthly budget. Our firm submits a budget to the court showing your monthly income, subtracting your monthly expenses, and any amount of money left over each month becomes the basis for your monthly payment in Chapter 13. That monthly amount, when calculated over the five year re-payment period, can then be expressed as a percentage. For instance, if you have $60,000 in unsecured debt, and you will pay $100 per month, you will pay $6,000 over a five year period. That is roughly a 10 percent Plan.

Common Triggers For Which Type Of Bankruptcy To File

There are some indicators which will push you in one direction or the other, when considering which type of bankruptcy to file. For instance:

  • Mortgage Arrears / Foreclosure – If you’re facing a foreclosure, or if you’re behind on your mortgage, Chapter 7 will not help you to manage that debt. If you wish to keep the house in bankruptcy, you will need to file a Chapter 13. The reason is that Chapter 13 is designed to FORCE YOUR CREDITORS to allow you to catch up on a mortgage over the five year re-payment period.
  • Vehicle Arrears – The same is true for a situation where you’re behind on a car payment. You can use a Chapter 13 to not only pay off the vehicle over the next five years, but also to slowly catch upon on the missed payments.
  • Excess Equity In An Asset – While bankruptcy allows you “Exemptions” to protect some or all of your property, there are times when you have too much equity in one or more assets. This may make a Chapter 7 an impossibility. Chapter 13, alternatively, allows you to file for bankruptcy. The compromise is that over the five year re-payment period, you must pay your unsecured creditors an amount equal to or exceeding the unexempt equity in your combined assets. An example would be a vehicle which has $10,000 in equity. You can exempt $3,500 of the equity with your vehicle exemption. That leaves $6,500 of “unexempt” equity. So long as your Chapter 13 plan pays your unsecured creditors at least $6,500 TOTAL over the five year re-payment period, you can file Chapter 13.
  • Priority Debt – Some debts take priority in bankruptcy. An example would be IRS debt which is less than four years old, or missed child support or spousal support payments. You can file a Chapter 7 with this type of debt, however, the debt will survive the bankruptcy. If instead you choose to file Chapter 13, the Chapter 13 Plan payments will be structured in such a way that when you finish Chapter 13 you are current on all priority debt. In the meantime, very little or NO INTEREST accumulates on those debts while you slowly repay. This can result in a savings of thousands of dollars for clients while giving them the breathing room of a five year period to re-pay.

Don’t Let Confusion Keep You From Moving Forward

If you’re asking “What type of bankruptcy should I file?!” don’t worry, we’re here to help. Often a quick phone call with our office can provide peace of mind that there are numerous options. And we can explain how each of those options work.

You can call us at 704.749.7747 or click to request a FREE CONSULTATION and you will speak with an attorney today. We know you have options. Recovery may be only a phone call away. We hope you choose to recover with The Layton Law Firm.

 

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What Happens To My Car In Bankruptcy?

What Happens To My Car In Bankruptcy?

If you own a car or lease a car, you will need to decide what happens to your car in bankruptcy. You have the choice to keep your car and the debt associated with it, or you can choose to surrender the car in bankruptcy. This means the car goes back to the lender, and the debt goes with it. There are one or two exceptions, which we will address. In summary, you can either keep the car and the debt, or ‘get rid of’ the car and get rid of (discharge) the debt.

How Can I Keep My Car In Bankruptcy?

If you want to keep the car in a Chapter 7, you will need to be current on payments by the date of your 341 meeting. You will sign a Reaffirmation Agreement with the lender, which will contain the same terms you had prior to the bankruptcy. The reason for the agreement is the filing of your bankruptcy technically relieves you of the obligation to repay the loan; however, if you want to keep the car, you will need to renew the agreement. The Reaffirmation Agreement accomplishes that.

If you want to keep your car in Chapter 13, you can do so. Your interest rate may decrease due to the interest rate set by the bankruptcy court. Additionally, if you have had the vehicle for more than 910 days, you may be able to lower the balance on the loan in Chapter 13, which can be a tremendous benefit.

How Do I Surrender My Car In Bankruptcy?

If you want to surrender the car and the debt, it is easy. We file your bankruptcy and reach out to the car lender to make arrangements for them to pick up the car or have you drop off the car in the alternative. The upside to addressing a car in bankruptcy is that you have options. Most clients are incredibly happy with the results of bankruptcy including the ability to have flexibility regarding vehicles. The rules of bankruptcy heavily favor the debtor—the person filing—and as a result, if you would like to keep a vehicle while discharging all unsecured debt, it is almost always an option.

Speak With A Bankruptcy Lawyer Today

If you would like to speak with us about what happens to your car in bankruptcy, you can request a free consultation. Just call 704.749.7747 or click HERE to request a time to talk. We know you have choices. We hope you choose Layton Law.

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New Year’s Resolution — File Bankruptcy Now

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New Year’s Resolution – File Bankruptcy Now

If you are thinking that the only thing that could make this year worse than last year is to stay buried in debt, it is time to file bankruptcy. You deserve the fresh start that filing bankruptcy provides, and our office can help.

Both Chapter 7 and Chapter 13 offer amazing and powerful relief from creditors, in exchange for providing detailed information about your income and assets. Whether you are considering a Chapter 7 liquidation or a Chapter 13 reorganization of debt, our office can assist.

A Fast And Easy Bankruptcy Filing

When you file with our firm, we make a point of streamlining the process leading up to the bankruptcy filing. This means all of your documents can be submitted through our online portal, and documents can be signed electronically as well.

Generally, we will need tax returns, vehicle registrations, bank statements, and a few other documents in order to prepare your bankruptcy filing. If you are facing a foreclosure or vehicle repossession, we can file an emergency bankruptcy prior to obtaining that documentation. This halts the process and gives you immediate relief from creditors.

A Lawyer And Staff That Cares

Our firm knows the anxiety associated with financial stress, especially as jobless claims increase across the state. Our goal is to provide you relief from that stress. We know the bankruptcy filing will give you financial relief; however, you will find our compassionate and diligent approach refreshing. We know lawyers have a reputation for being ‘stuffy’. You will not find that at The Layton Law Firm. Instead, you will experience quality conversations, routine updates on your case, and you will come away with the confidence you need to start fresh.

Speak With A Charlotte Bankruptcy Lawyer Today

If you are ready to move forward or just have questions, we are here. You can reach us at 704.749.7747 or click HERE to request a consultation by phone. All consultations are free and answering questions is part of the job. We know you have choices. We hope you choose Layton Law.

 

 

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Bankruptcy For Medical Bills

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Bankruptcy For Medical Bills

You can file bankruptcy for medical bills. Not only will your medical bills be discharged by the bankruptcy, but your other existing unsecured debt will be discharged by filing bankruptcy as well. While this is sometimes referred to as a Medical Bankruptcy, there is no specific legal term for this. It simply signifies that the primary reason you are filing bankruptcy is due to your medical bills.

Your Medical Bills Must Be At Least 90 Days Old

At the time of your bankruptcy filing, your medical bills must be at least 90 days old. This refers to the date of service which gave rise to the medical bills. If the bills are less than 90 days old at the time of the filing, the medical creditor can assert their rights through the bankruptcy by filing an objection to discharge, or in the alternative, that their bill should survive the bankruptcy. Because of this, we often discuss health concerns with our clients who want to file bankruptcy due to medical bills. If you have an upcoming surgery or large medical expense, we may choose to strategically wait to file your case until after the date of service is more than 90 days old.

Medical Bills Due To Personal Injury

North Carolina can be a challenging state when it comes to medical bills in a personal injury claim. Many times, a personal injury settlement will not address one hundred percent of your medical bills. This means you find that you have settled your personal injury claim for as much money as you can, yet you have remaining medical billing related to the injury. Filing bankruptcy for medical bills will address the remaining medical billing associated with your personal injury.

Assets And Income Still Matter

As with any bankruptcy, if you file bankruptcy for medical bills, you still need to pass the income and assets test in order to file a Chapter 7. Our office will work hand in hand with you to determine if you can file a Chapter 7. In the alternative, Chapter 13 is almost always an option.

Alternatives To Filing Bankruptcy

Often, our firm represents clients in debt settlement or debt negotiations. It may be that the client can not file bankruptcy or does not want to file bankruptcy. In any case, as a bankruptcy firm, we hold special leverage against creditors in the negotiation process. Often, this leads to a great result for the client.

Speak With A Charlotte Bankruptcy Lawyer Today

If you have questions about whether bankruptcy clears the debt, we are here to help. Call us at 704.749.7747 or click HERE to request a free phone consultation. We know you have choices. We hope you choose Layton Law.

 

 

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What Happens To My Mortgage If I File Bankruptcy?

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What Happens To My Mortgage If I File Bankruptcy?

If you own a home and file bankruptcy, you can keep your home and mortgage secured by the mortgage. Depending upon whether you file Chapter 7 or Chapter 13, the course of events that follows the filing of the bankruptcy will be slightly different. One analysis that must be done relates to the equity in your home. Generally speaking, you are allowed $35,000.00 in equity per spouse to keep a home in Chapter 7. This is known as an Exemption. In Chapter 13 you can have additional equity beyond those limits; however, it will affect your Chapter 13 payment.

Your Mortgage In Chapter 7

If you own a home with a mortgage and you file Chapter 7, it is important that you are current on your mortgage upon filing the Chapter 7, or by the time of the 341 hearing at the very latest. If you wish to keep the home in Chapter 7, you will continue to make mortgage payments to a bankruptcy department at the mortgage company while the Chapter 7 case is active. Once the case closes, you will resume making payments to the mortgage company in the same manner you did prior to filing.

It is important to note that the filing of a bankruptcy technically discharges the debt (mortgage); however, unless you are planning to surrender the property in bankruptcy, you will need to continue to make mortgage payments.

Unlike reaffirmations for car loans, mortgage debt is very rarely reaffirmed in bankruptcy. Courts frown upon it in an attempt to protect debtors who have recently received a discharge from substantial debt. The American Bankruptcy Institute has written at length about this stance.

If you do not reaffirm your mortgage, provided you stay current on mortgage payments post-bankruptcy, the mortgage lender has no recourse. You keep the house as long as you keep making payments. You receive credit against your balance for all of your payments, and you build equity presuming the value of the house continues to increase.

One downside to not reaffirming a home is that the mortgage company will not report your payments to the credit bureaus. Your remedy for this is to send a letter once a year to each credit bureau indicating the payments you have made. If the creditor fails to file a response disputing that you made the payments, you will get credit for the payments on your credit reports.

One tremendous upside to not reaffirming a mortgage in Chapter 7 is that if you lose your job, the house value is ‘upside down’ in the future, or for any other reason you wish to walk away from the house (and the debt), you can do so. The lender is limited to receiving the property as their only recourse. They can not pursue you for any remaining debt on the home in the event they sell it for less than what you owe on it.

Your Mortgage In Chapter 13

In Chapter 13, you can also keep your home and mortgage, provided you continue to make payments as usual. Additionally, many clients use Chapter 13 as a way to force the lender to let them catch up on missed payments. Your Chapter 13 plan will propose to pay the normal mortgage amount, plus a small amount each month for the purpose of catching up on missed payments over a 60 month period. When the Chapter 13 bankruptcy closes out after 60 months, your mortgage will be deemed current.

Due to the ability to use Chapter 13 for the purpose of catching up on missed payments, many clients use Chapter 13 to avoid a foreclosure. A Chapter 13 can even be filed as an emergency filing, in order to stop a foreclosure. So long as you make ongoing payments in Chapter 13 under your confirmed Chapter 13 plan, the mortgage lender has no choice but to allow Chapter 13 to move forward. Additionally, you will be obtaining a discharge of unsecured debt in Chapter 13.

Old Mortgage Debt In Bankruptcy

If you have old mortgage debt on your credit, a Chapter 7 or Chapter 13 filing will address that debt and your discharge will include it. If your current mortgage is a burden you can surrender your current real estate to the lender in bankruptcy, and the lender will be limited to the home as repayment of their debt– the bankruptcy filing will prevent them from pursuing you as an individual if the sale of the property leaves a remaining balance on the mortgage debt.

Speak With A Bankruptcy Lawyer Today

If you are facing foreclosure or would like to consider bankruptcy for another reason, we are here to help. Our clients who own real estate are able to file bankruptcy every day while keeping their homes. We can show you how. If you would like a consultation you can call 704.749.7747 to speak with an attorney today. Or you can click HERE to request a consultation. All consultations are free and can be done over the phone. We know you have choices. We hope you choose Layton Law.

 

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Bankruptcy Is Not A Four Letter Word

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Bankruptcy Is Not A Four Letter Word

Currently, both bankruptcy and Covid-19 are spreading quickly. As we begin to see Fortune 500 companies file for bankruptcy due to Covid-19, it is a great time to remind ourselves that bankruptcy can be viewed as a business decision. In fact, filing bankruptcy is what saves many companies and enables them to thrive in the market post-bankruptcy. It is too early to tell whether companies filing bankruptcy now will bounce back; however, historically we do know that companies like Apple, General Motors, and Hostess all successfully bounced back with the help of a bankruptcy filing.

There are also famous individuals who filed bankruptcy and went on to great success. This was long before bankruptcy and Covid-19, but among them are Walt Disney, Donald Trump, and Abraham Lincoln. These individuals understood that bankruptcy is not  a four letter word. If anything it is more akin to a seven letter word: F-R-E-E-D-O-M. The day you file bankruptcy is the day you play your ace card against oppressive creditors and accumulating debt.

Bankruptcy Is The First Step To Recovery

One common concern regarding a bankruptcy filing is how long it will take you to bounce back from bankruptcy. Truthfully, it is the bankruptcy filing that is the first step in recovery for a business or individual. The bankruptcy filing brushes back creditors and forces them into a plan the company can manage while they continue to conduct business. The same is true of a personal bankruptcy filing.

From the day you file bankruptcy, you get relief from creditors. They are no longer allowed to pursue you for collection of debts, or legal actions against you related to debt. As a result, you can finally breathe again. Your income is no longer being shoveled to creditors whose balances do not seem to move despite significant payments each month. Instead, you can use those funds to pay for the needs of yourself and your family. If you file a Chapter 7 bankruptcy, you will receive a discharge of your debts. If you file a Chapter 13 bankruptcy, you will enter into a re-payment plan which quite often requires you to pay less than 10% to your creditors spread out over a five year period.

As one of our favorite clients said in a recent review of the firm “Chapter 7 and Chapter 13 are just that: Chapters. They are not the entire book!”

Treat It Like A Business Decision

You can choose to view a bankruptcy filing as a business decision—or at least a financial one—for you and your family. Smart business owners put their emotions aside and do what has to be done for the health of the company. Most of our clients realize that bankruptcy is not an emotional experience; however, they do confess that it was their emotions that kept them from filing sooner. Unfortunately, this means months or years of payments to creditors on debts which are ultimately discharged in bankruptcy. If you act quickly, you can avoid spending any additional money on unsecured debt which will be addressed with one bankruptcy fee and one bankruptcy filing.

The bankruptcy court has remained open despite Covid-19, allowing debtors to move forward with their financial recoveries. Most hearings are done over the telephone at this time, which is a great convenience for all parties and a wonderful solution as the courts are busier each month with bankruptcy filings.

Take The Next Step

The next step is simple. Call us to speak with an attorney. The call is free and you deserve to understand your options. We can be reached at 704.749.7747. We are happy to answer questions about bankruptcy and Covid-19. Or, you can click HERE to request a consultation by filling out a very short form.

Watch A Short Video

If you’d like to know a little more about the firm, watch this short one minute Introductory Video by Chris Layton. We know you have choices. We hope you choose Layton Law.

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Bankruptcy And Keeping Your Home

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Bankruptcy And Keeping Your Home

If you are considering filing bankruptcy with the goal of keeping your home, there is good news. There are numerous ways in which you can keep a home in bankruptcy even when you have equity in that home. You can also prevent a foreclosure with a Chapter 13 bankruptcy, and we have written more extensively about that in our article Emergency Bankruptcy To Stop Foreclosure.

The Homestead Exemption

Under N.C. Gen. Stat. sec. 1C-1601(a)(1), you can exempt up to $35,000.00 in equity of any real or personal property used as a residence. If you own the property with your spouse, this amount doubles to $70,000.00. Your equity is generally calculated as your fair market value minus obligations (mortgages). While there are costs of sale to be considered as well, the bankruptcy court is most interested in the sales value minus the amounts owed on the mortgage(s).

As part of pre-bankruptcy planning, you will want to have a real estate broker give you a written opinion as to what they think your home would sell for. Most real estate agents provide this service free of charge, and it will be used as evidence as to the value of the home, when the bankruptcy case is filed.

Tenancy By The Entirety

Another way for keeping your home in bankruptcy is by utilizing Tenancy By The Entirety to protect your equity. You have a Tenancy By The Entirety when you purchase property in North Carolina as a married couple, and both of your names appear as Grantees on the deed. Property owned as Tenants By The Entirety is afforded an unlimited exemption except as to joint creditors of both husband and wife.

A common instance when Tenancy By The Entirety is utilized is when one spouse has the majority of debt, and is filing bankruptcy without the other spouse joining in on the filing. Provided the unsecured creditors of the filing spouse are his creditors only—and not joint creditors of both spouses—those creditors will not have access to the equity in the home in a bankruptcy filing.

Unexempt Equity In Bankruptcy

In the event you have ‘too much’ equity to protect all of it in your bankruptcy filing, you are not precluded from filing. You and your attorney will simply have to assess the amount of unexempt equity  and decide whether Chapter 7 or Chapter 13 is the right chapter for you.

If you have unexempt equity in a Chapter 7 and you want to keep your home in bankruptcy, you will need to be prepared to pay the Trustee the amount of unexempt equity, or some negotiated amount based on the unexempt equity. This is not an option for all individuals, but it is worth noting the Trustee will typically allow a six to nine month repayment period in such instances.

It is not uncommon to move forward with a Chapter 7 despite having a small amount of unexempt equity. Your bankruptcy lawyer will prepare you for the negotiation with the Trustee and make sure your expectations are in alignment with the rules of bankruptcy.

The Chapter 13 Equity Option

If you have a significant amount of unexempt equity in your home, and you are unable to pay the Trustee over a six month period, you can certainly consider filing Chapter 13. In a Chapter 13, so long as you pay the court the unexempt equity over a five year (60 month) period, you have met your burden to unsecured creditors and the home is yours to keep. We have written more about Chapter 13 payment calculations in our article How Much Will My Chapter 13 Payment Be? Your unexempt equity is only one factor which will ultimately determine your monthly Chapter 13 payment.

Speak With A Bankruptcy Lawyer Today

If you are considering filing bankruptcy and you are concerned with whether you will be able to keep your home, we’re here to help. You can call us at 704.749.7747, or click HERE for a free consultation. If you’d like to meet Chris Layton, you can watch a one minute introduction video to see if you might want to work with us. We know you have choices. We hope you choose Layton Law.

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What Are The Chapter 13 Income Limits?

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What Are The Chapter 13 Income Limits?

Generally speaking, there are no income limits in Chapter 13. A Chapter 13 bankruptcy is commonly referred to as a reorganization of your debt. More simply stated, Chapter 13 is an arrangement where you commit some portion of your income to pay your creditors. Provided you honor that commitment for 60 months, the remainder of the debt is discharged.

What Percentage Of My Income Do I Have To Commit?

The answer to this question is different for each individual or married couple entering Chapter 13. While a Chapter 13 plan may ultimately be referred to by the percentage you are paying your creditors, the analysis does not begin there. Your Chapter 13 bankruptcy attorney works with you prior to filing, to determine your monthly net disposable income. If your income (after taxes) is $10,000 per month, and your ongoing expenses each month (not including unsecured debts) are $9,575, then your net disposable income would be roughly $425. This would be the amount the court would require you to commit to your Chapter 13 monthly payment.

If your Chapter 13 plan is 60 months long and you commit $425 a month to unsecured creditors in the plan, you will pay a total of $25,500 to unsecured creditors over the course of 5 years. If you have $100,000 of unsecured debt when you enter the plan, your plan is roughly a 25% plan. This is true because you are proposing to pay roughly 25% of your unsecured debt over 5 years, in exchange for a complete discharge of the remaining 75% of the debt when you finish the plan.

Consider another debtor with the exact same income and monthly expenses, yet that debtor has $200,000 of unsecured debt. That debtor would pay the same $25,500 over 5 years; however, his or her plan would be a 12 or 13% plan, simply because their unsecured debt is greater than that of the debtor in the first example.

Are There Debt Limits In Chapter 13?

Yes, there are debt limits in Chapter 13. As of April 2019, you can have $419,275 in unsecured debt, and $1,257,850 in secured debt at the time of filing. Your bankruptcy attorney will perform a debt analysis with you to determine both the nature of your debt and the amount of your debt.

Speak With A Bankruptcy Attorney Today

Getting started with bankruptcy planning is easy and we are happy to discuss income limits in Chapter 13 and debt limits in Chapter 13 with you. You can call us at 704.749.7747 for a free consultation or click HERE to request a phone call. A lawyer will call you today.

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Bankruptcy And Foreclosure

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Bankruptcy And Foreclosure

If you’re considering bankruptcy and foreclosure proceedings have started, you need to act quickly. Filing a bankruptcy will stop a foreclosure proceeding; however, you will need a plan to either repay the mortgage lender over time in Chapter 13, or surrender the property within roughly sixty days of filing the bankruptcy.

Bankruptcy And The Automatic Stay

When you file your Chapter 7 or Chapter 13 bankruptcy, the Automatic Stay goes into effect. This protection means that creditors—including your mortgage lender—are no longer allowed to try to collect on a debt. Foreclosing on property is the equivalent of attempting to collect on debt. As a result, when you file bankruptcy, all foreclosure proceedings come to a halt.

Foreclosure And Chapter 7

If you are behind on your mortgage and you file Chapter 7, the bankruptcy filing will serve to temporarily stop foreclosure proceedings. Because Chapter 7 makes no allowance for paying a mortgage lender, you will need to either make payments to the mortgage lender to get current, or plan to surrender the property in bankruptcy.

When you go through a foreclosure, if your mortgage lender sells the property and the proceeds from the sale are not enough to satisfy the debt, the mortgage lender can pursue you for the remaining balance. Chapter 7 protects you from this result. If you surrender your property in a Chapter 7 bankruptcy, the lender will not be able to pursue you for any shortages when they sell the property. In essence, any remaining debt is discharged by the bankruptcy filing.

Lastly, if a lender ‘forgives’ any remaining debt, you may receive a 1099 form from the federal government for forgiveness of debt. You will be responsible for the taxes on that forgiveness of debt, as it is treated as income for tax purposes. However, once again, Chapter 7 relieves you of this burden.

Foreclosure and Chapter 13

A Chapter 13 filing allows you to force your mortgage lender to allow you to ‘catch up’ on your mortgage over time. Typically, a Chapter 13 plan is a five year plan. If you are facing a foreclosure and want to keep the home, a Chapter 13 filing can allow you the time you need to continue making your normal mortgage payments while also slowly repaying the mortgage lender for whatever amount you were behind at the time you filed your Chapter 13.

You can also surrender a home in Chapter 13. As a result, you will be afforded the same protections against foreclosure you receive in Chapter 7, which are outlined above.

How Long Will Bankruptcy Hold Off A Foreclosure?

If you file a Chapter 13 and your plan proposes to pay the lender over time, the foreclosure proceeding will stop and as long as you continue to make your Chapter 13 plan payments, you will not face the threat of foreclosure. Additionally, at the end of the Chapter 13 plan, you will be current on your mortgage.

If you file Chapter 13 or Chapter 7 and do not make provisions to repay the lender the amount you are behind, you can expect that the filing of the bankruptcy will temporarily stall the foreclosure proceedings by about 60 days; however, your lender will typically file a motion for relief from the automatic stay. That motion will be approved by the court, and the lender will be allowed to proceed with their foreclosure.

If your foreclosure sale is coming up quickly, you may consider filing an Emergency Bankruptcy, and we can assist with that filing. The Emergency Bankruptcy allows you to receive the protection of bankruptcy while you work with your attorney to gather the required documentation for a normal bankruptcy filing.

Speak With A Charlotte Bankruptcy Lawyer Today

If you are considering filing bankruptcy, it’s important that you speak with a Charlotte bankruptcy attorney. The call is free and you will come away with a much better understanding of your options. You can reach us at 704.749.7747 or click to request a FREE CASE EVALUATION, and we will be in touch shortly.

Further Reading

If this article about bankruptcy and foreclosure was helpful, you may find other helpful articles on our Bankruptcy Blog. Thank you for visiting the website—we hope it has been helpful.

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Is Bankruptcy Public Knowledge?

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Is Bankruptcy Public Knowledge?

Yes, your bankruptcy filing is public knowledge. However, the chance of someone finding out you filed bankruptcy is not as good as you might think. In fact, other law firms routinely call our office to ask us to check to see if an individual or company has filed bankruptcy. The reason it’s difficult for someone to find out you filed bankruptcy is that information is stored on PACER. PACER is an electronic system that stores records. In order to access it, you must register and pay per page for any materials you would like to view. As a result, most PACER users are bankruptcy lawyers, creditors, and attorneys. As a result, the chance your friends, family members, and co-workers find out you filed bankruptcy is very small.

Bankruptcy And Your Credit Report

While we have written in the past about bankruptcy and your credit score, it’s important to know that bankruptcy will show on your credit report for up to ten years. This is not a cause for alarm, because your credit score is more important than how long bankruptcy shows on your credit report. In fact, unless your credit was perfect before filing bankruptcy, your credit score a year after filing bankruptcy will typically recover to what it was the day before you filed. From there, if you follow a few simple strategies for building your credit score, you will continue building a healthy credit score.

Credit Card Offers

Our clients report to us that they start receiving credit card offers shortly after filing for Chapter 7 bankruptcy. One reason for this is that bankruptcy improves your Debt To Income Ratio. Your debt to income ratio compares your income to the amount of debt you have. When you file bankruptcy, you eliminate a large amount of debt. As a result, your debt to income ratio improves. Creditors see you as a good candidate for credit card offers. First, they know you do not have any other debt to pay. Second, they know you can’t file bankruptcy again for at least 8 years. As a result, you will start to get credit offers, which may surprise you.

Automobile Financing

Most clients are surprised to find out they can keep their car in bankruptcy. However, you may want to obtain a new car just before or just after filing bankruptcy. Even Chapter 13 clients who are in an ongoing bankruptcy, are able to obtain financing for new cars. This surprises many clients. Additionally, the process for getting approved for new vehicle financing in Chapter 13 is quite easy.  Again, another myth of bankruptcy is dispelled by the reality that filing bankruptcy serves to protect you more than it serves to harm you.

Life After Bankruptcy Gives You A Chance To Excel

Yes, bankruptcy is public knowledge. What’s more important is how positively your life will be affected from the day you file your bankruptcy. Without the ongoing debt payments, filing bankruptcy is like giving yourself the raise you deserve. You’ll find you have more money left over each month after paying bills, you can balance your budget and save for special events like birthdays and Christmas, and you’ll even be able to help a relative in need if you desire. You deserve a second chance, and we’re eager to help you seize the opportunity.

If you are considering filing bankruptcy, it’s important that you speak with a Charlotte bankruptcy attorney. The call is free and you will come away with a much better understanding of your options. You can reach us at 704.749.7747 or click to request a FREE CASE EVALUATION, and we will be in touch shortly.

Further Reading

If this article “Is Bankruptcy Public Knowledge?” was helpful, you may find other helpful articles on our Bankruptcy Blog. Thank you for visiting the website—we hope it has been helpful.

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