What is a Chapter 13 bankruptcy?
Individuals who have regular income can file a petition under Chapter 13 of the Bankruptcy Code to pay their debts in installments. This includes people who receive a regular pay-check and those who are self-employed. These payments are sent to the Chapter 13 Trustee over a period of 36 to 60 months. If the total contributions to the Chapter 13 Plan are less than the total debts owed, the remaining balance can be discharged or avoided.
Filing a Chapter 13 can also help when a couple is behind on their home mortgage payments. The Plan can cure or catch up all delinquent amounts over time while the owners maintain and keep the payments current as they become due. The same thing applies when a person has not been able to make the car payments on time but wants to keep the car.
If you have a question about how to file a Chapter 13 bankruptcy, we can help you. Call Fred Simon Law at 502-558-8576 to discuss your situation today.
What is a reaffirmation agreement?
A reaffirmation agreement is a deal you can make during bankruptcy to keep important things like your car or house. In exchange, you agree to keep paying off the debt tied to that asset. This means the debt won’t be wiped out by your bankruptcy, and you must continue making payments. If you miss payments, the lender can take back the asset and still make you pay the remaining balance.
If you decide to cancel the agreement, you must do so before the bankruptcy discharge, and you must notify both the lender and the court in writing. Canceling means the debt will be discharged, but you might lose the asset tied to it.
If you have questions about a reaffirmation agreement, contact Fred Simon Law at (502) 558-8576 today.
What is the bankruptcy means test?
The bankruptcy means test, created in 2005, helps determine who can file for Chapter 7 bankruptcy, which is quicker and easier, versus Chapter 13, which takes longer and involves strict spending rules. It was designed to stop wealthy people from taking advantage of the system. Most people who file for Chapter 7 don’t have to give up any property because it’s all considered exempt.
To qualify for Chapter 7 bankruptcy, you must pass the bankruptcy means test, which primarily looks at your income. Specifically, your income should be below Kentucky’s median income for a household’s size. If your income is above the median, you may still qualify by passing a more detailed means test calculation that examines your expenses and disposable income.
If you have questions about the means test or filing Chapter 7 bankruptcy, call Fred Simon Law at (502) 558-8576 today.
What is an automatic stay in bankruptcy?
An automatic stay is an injunction that goes into effect when you file for bankruptcy, preventing creditors from starting or continuing collection efforts against you. Its purpose is to provide temporary relief and protection from various types of debt collection, including foreclosure, eviction, utility shutoffs, and wage garnishment. This allows individuals to reorganize their finances without the immediate pressure of creditors.
An automatic stay usually lasts throughout one’s bankruptcy case, but it can be lifted if a creditor shows they are caused financial harm, such as not being paid on a secured home loan. An automatic stay, however, does not cover all debts, such as a domestic support order.
If you are interested in learning more about an automatic stay, call Fred Simon Law at (502) 558-8576 today.