NC Bankruptcy Blog

Due Date and When in a Month to Pay the Chapter 13 Payment

Coming into chapter 13 bankruptcy, a common experience of individuals is payment due dates and the sometimes harsh consequences that follow from missed due dates. When money has been tight, the experience of a late payment fee and a default interest rate is frustrating and stressful. Naturally, with that experience, there can be some anxiety when I discuss that the plan payment is due the first of each month (in the Eastern District of North Carolina -- Raleigh's Bankruptcy Court). The shadow of past interactions with credit accounts covers expectations regarding the process of paying the trustee. So, going into chapter 13 bankruptcy, there is an opportunity to gain insight in advance of how chapter 13 plan payments are administered.

Skipping the Means Test with Non-consumer Debt

The chapter 7 means test serves to limit eligibility to file chapter 7 bankruptcy, posing a problem for individuals with household income above the state median income and with expenses that don't fit well into the Congressionally-designed deduction system. Individual is primarily non-consumer debts don't have to take this means test at all.

In Personal Bankruptcy, What Happens to My Small Business?

No two businesses are the same, and this diversity is echoed in the implications the personal bankruptcy of a business owner has on a small business. Nevertheless, several general points can be considered:

  1. How the small business is organized
  2. The chapter of bankruptcy relief sought
  3. What the small business is worth
  4. The nature of business operations

I will discuss each of these in turn.

Stuck in a High Interest Car Loan? Chapter 13 Can Lower Rates

Here in North Carolina, a car is typically essential transportation. Owning a car can be vital to continued employment. Lenders and car lots know this, and are very willing to loan money to buy a car. The catch, however, is a high, sometimes very high, interest rate. A high interest rate strains a household budget, and can prolong the debt burden beyond the serviceable life of the car. Bankruptcy offers tools for consumers to get out from the burden of crushing auto loan interest.

Map of Bankruptcy Rate by NC County

Bankruptcy filing rates vary considerably across the state. For example, in 2013, 7 times more people per capita filed bankruptcy in Vance County than in Mitchell County. I've plotted this data on a map, with green representing the lowest filing rate, red the highest filing rate, and yellow the state average filing rate. There are several different methodologies for calculating a filing rate, so the numbers themselves are most illustrative as comparison amongst counties, rather than as an absolute value.

Reversing Wages Garnishments and other Seizures in Bankruptcy

The assistance bankruptcy can offer to a person struggling with having his or her wages garnished is not limited to preventing in the immediate future. It's also possible, in some cases, to get the money back from the creditor who seized it. In considering whether this remedy is available, there are two sets of questions: (1) can the transfer be reversed and (2) does the money go back to the person who filed bankruptcy or does it go to the bankruptcy trustee.

Modify What Exactly? Modifications in Bankruptcy

Bankruptcy is unfortunately jargon-filled. Worse, some words have different meanings depending on the bankruptcy context. On this blog, I've previously discussed the two meanings of feasibility in bankruptcy. Another word that leads to confusion is modify and modification.

There are three common contexts where the term modify is observed:

Bankruptcy and Tax Refunds

For many North Carolinians, annual tax refunds play a valuable role in the household budget. When contemplating bankruptcy, it's worth considering how the bankruptcy process interacts with the receipt of tax refund payments.

Special Classification of Unsecured Debt in Chapter 13

In a chapter 13 plan, the basic plan treatment for non-priority unsecured claims (which include items such as medical bills, credit cards, many judgments) is to treat all such claims the same way. In some chapter 13 plans, this might mean paying nothing to each and every non-priority unsecured claim. Other times, each such claim might be paid the same percentage (either a fixed percentage or a percent calculated based on available funds). Oftentimes, this is a perfectly acceptable way to handle these claims. However, it will sometimes be desirable to adjust this treatment so that different general unsecured creditors are paid differently. In chapter 13 bankruptcy, this is the concept of special classification.

Can I still file bankruptcy if the government shuts down?

With the threat of a shutdown of the federal government looming, a question on the mind of those planning to seek bankruptcy relief is what happens to the bankruptcy system in the event of a shutdown.


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