Filing for bankruptcy can be an incredibly confusing and stressful time. But it doesn’t have to be! An experienced and trusted bankruptcy attorney can guide you through the process, and let you in on several little-known tips that will benefit you as you navigate the process.
910-Day Cram Down to Value
When filing for Chapter 13 bankruptcy, you need to follow the 910-day rule when buying a car. This means that to discharge a debt or pay less than you owe, you must have purchased the car at least 910 days before filing for bankruptcy. This prevents you from buying a new car, knowing that you intend to file for bankruptcy soon and never plan on paying the full balance of the loan.
Redemption for Vehicles in Chapter 7 Bankruptcy
You can “redeem” a vehicle under Chapter 7 bankruptcy to keep it and clear it from a lien. You and your attorney can work with the lender and agree on the value of the car. You can then get financing to pay the entire value of the car to the lender after the bankruptcy is finalized. This will help you avoid having the vehicle repossessed.
Avoidance of Judgement Liens in Primary Residence
During bankruptcy, you can get a judgment lien removed from your home, or primary residence in certain situations. If the equity in your home that falls under the lien is covered by the homestead exemption, then the lien can be removed.
Avoidance of Second Mortgage in Chapter 13
If you have a second mortgage on your home, you can remove it by filing a lien-stripping motion with the court. Once this is approved, the second mortgage will be handled just like any other unsecured debt through your Chapter 13 plan. However, you must complete your Chapter 13 repayment plan, and finalize the bankruptcy for this to stick.
Recovery of 90 Days of Garnishment (If there Are Sufficient Exemptions)
As soon as you file for bankruptcy, an automatic stay goes into effect. This pauses all collection attempts from creditors – including wage garnishments. In addition, you might be able to recover wages that were garnished within 90 days of your filing for bankruptcy, if the amount is more than $600, and you have exemptions that cover them.
Work with your bankruptcy attorney to find out how to recover these funds, and to ensure you qualify.
File for Emergency Bankruptcy to Stop Garnishments, Repossessions
When applying for bankruptcy, you can submit an emergency filing. Typically, this happens if you are facing wage or bank garnishments, a lawsuit, or a foreclosure. Filing for bankruptcy puts an automatic stay in place to protect your assets – stopping garnishments, repossessions, and foreclosures.
Payment of IRS Liens to the Asset Value Through Chapter 13 Bankruptcy
If you owe money to the IRS, your bankruptcy attorney may be able to help you reduce the amount you owe. The allowed value of a Tax Lien’s Secured Claim is limited to your Cram Down value. In short, this means you can pay less than what you initially owed. You will need to work with your bankruptcy attorney to pursue this correctly.
Effects of Late Proof of Claims Filings By Creditors
When you file for bankruptcy, your creditors file a proof of claim to show how much you owe them. They must submit this by a certain date. If they miss the deadline, then they are not owed any payments through the repayment plan.
Discharge Older Income Taxes Under Certain Conditions
Generally, when you owe money to the IRS, you cannot discharge it through your bankruptcy. However, there are certain situations where you can get it wiped out through Chapter 7 bankruptcy. You must meet the following conditions:
· You owe federal or tax income taxes, through a regular tax payment.
· You did not commit tax fraud or tax evasion.
· Your debt is at least 3 years old.
· You filed a tax return at least 2 years before filing for bankruptcy.
· Your debt was assessed by the IRS at least 240 days before filing for bankruptcy.
Let Us Help You
Filing for bankruptcy is a long, complicated process. You need help from a trusted bankruptcy attorney to give you inside tips to make it easier. Let our lawyers at The Law Offices of Alexzander C.J. Adams, P.C. help. We work for you, the people, and not institutions. Contact us for a free case evaluation, or no-obligation consultation. We are dedicated to helping you overcome this small bump in the road and assisting you to get on with your life.
