NC Bankruptcy Blog

Cash Flow and Chapter 13 Filing

Many chapter 13 bankruptcy plans take over payments on debts that the debtor beforehand was paying directly. Mortgage payments and car payments are the most common examples. Therefore, there is a transition between the last direct payment to the lender and the filing of the case and commencement of payments to the chapter 13 trustee. Careful timing of this transition can make coming up with the cash for the first month's chapter 13 payment more manageable.

Secured Credit 101: Priority of Liens

More than one creditor might have a claim to a security interest in collateral, especially valuable collateral. The most common example is a second mortgage or a home equity line of credit, when the homeowner has pledged the house as collateral, despite the fact a first mortgage exists. Just as the idea with one-lien collateral is that sale of the collateral provides an alternative source of payment for a loan, when there are multiple liens the idea is the sale of the collateral could in theory pay all of the loans. How does the law decide which creditor has greater rights? The law of secured transactions handles this with the concept of priority.

Secured Credit 101: Security and Perfection

Consumer secured lending is a commonplace part of many household budgets. Major purchases like homes and cars are almost always financed, while other consumer transactions, like the purchases of furniture, electronics, appliances, and HVAC equipment are sometimes financed. A lender will often seek to retain rights in collateral as additional assurance that the loan will be paid. Sometimes, a consumer will pledge property they already own as collateral to a new loan, such as a home equity line of credit. In the legal lingo, these are all "secured transactions" aiming to create secured debts.

Chapter 7 Means Test and Surrendered Property

For chapter 7 debtors, statutory means testing applies to individuals above the state median income. The availability of means testing deductions determines the result of the statutory formula, and whether a given debtor can proceed in chapter 7. One means test deduction is for payments on secured debts due in the next 60 months. By this deduction, if a debtor has an expensive mortgage payment, that payment is accounted for in determining if any monthly income is available for unsecured creditors.

Filing Bankruptcy Without Your Spouse

When filing bankruptcy, many married couples file a joint petition, a kind of bankruptcy petition where both the husband and wife are full participants. However, a joint filing is not required, and the husband or the wife can individually file a bankruptcy. When can an individual spouse filing be useful? What are some reasons only one spouse files? Read on for more about one-spouse bankruptcy.

May 2012 Means Testing - Helpful Changes to Expense Allowances

The bankruptcy means test is important in multiple ways to bankruptcy filers. It can determine chapter 7 eligibility, and in chapter 13 can affect both plan duration and payments to creditors. The statistics used in means testing are updated periodically by publication of the United States Trustee. The newest numbers are valid for cases filed on or after May 1, 2012, and include a number of updates that will be positive for many debtors.

Repaying Credit Cards in Chapter 13

Most people do not use chapter 13 to repay credit card debts. It’s often the case that a debtor is permitted under the bankruptcy code to obtain confirmation of a chapter 13 plan that pays nothing to unsecured creditors. For debtors making payments on credit cards in chapter 13, the chapter 13 plan serves as a consolidation loan on terms favorable to the borrower.

Keeping Tools and Equipment in Bankruptcy

Can I keep my tools or business equipment? For a self-employed person, this is an important question when considering bankruptcy. Keeping your equipment is critical to keeping yourself employed in your trade. Fortunately, North Carolina provides an exemption for tools of the trade. In some cases, this exemption can very helpful for retaining tools, equipment, professional books, and other such items.

Credit Cards and Chapter 13 Bankruptcy

Many people have credit card debt, and many people file chapter 13 bankruptcy. But what about when there is credit card debt in chapter 13 bankruptcy? Chapter 13 plans are repayment plans, a fact that causes a good bit of uncertainty for people considering bankruptcy as a way to get out from burdensome credit card payments. This post explains the basics of how credit cards are treated in chapter 13, and explains why many chapter 13 plans provide no payment at all to credit card lenders.

Hurry or Wait? Reasons One Waits Before Filing Bankruptcy

The first part of this post discussed reasons people file bankruptcy quickly. Today, I continue by discussing some of the numerous reasons people wait some period of time before filing bankruptcy. As noted in the prior post, the timing of filing a bankruptcy case can be a complex decision. Even within one case there can be reasons to move quickly and reasons to move slowly. Knowledgable bankruptcy counsel can be of great assistance in balancing these competing concerns.


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