Category Archives: Chapter 13 Bankruptcy

Do you need to reorganize your debt and get your debt under control? Attorney provides information about Chapter 13 bankruptcy.

What Are the Most Common Priority Claims in Chapter 13 Bankruptcy?

Chapter 13 bankruptcy allows you to reorganize your debt and create a reasonable payment plan to offload some or all of your debt. These payments plans typically last between three and five years before the remaining amount is discharged. When it comes time to create your plan for repayment, you may notice that some of your creditors are given priority over the others. What Are Priority Claims in Chapter 13 Bankruptcy? Once you’ve filed for Chapter 13 bankruptcy, your creditors will be categorized by their different types, including: Priority Claims Secured Claims Unsecured Claims Nonpriority unsecured claims Priority claims are debts that have been deemed nondischargeable through bankruptcy, and are to be paid in full through your repayment plan. Just because these debts are labeled nondischargeable does not mean that Chapter 13 bankruptcy will not help you take care of them. In fact, many people who file for Chapter 13…
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What You Need to Know about Chapter 13 Lien Stripping

If you are thinking of filing for Chapter 13 bankruptcy and have a second mortgage on your property, you should understand the process of lien stripping. Almost unheard of to people unfamiliar with bankruptcy law, lien stripping has become more popular due to factors surrounding the current housing market. In Chapter 13 bankruptcy, you will come up with a payment schedule based on your income in order to eliminate your outstanding debts. The first debts affected by your payment schedule will be the secured ones, which are the debts with collateral attached to them. Home loans, car loans and other property that can potentially be repossessed fall under this category. Lien stripping is the process of forgiving debts that are not usually eligible to write off. Your second mortgage is a secured debt, but when you utilize lien stripping, the debt becomes unsecured and thus dischargeable. Examples of Chapter 13…
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Supreme Court to Decide Fate of Underwater Debtors

The United States Supreme Court is set to pick up an unusual Chapter 7 bankruptcy case that had recently been challenged, because the Circuit Court of Appeals allowed a debtor to strip off his second mortgage with Chapter 7 bankruptcy. Generally, you cannot remove an underwater second mortgage in Chapter 7 bankruptcy. Chapter 13 bankruptcy is usually the method for removing these debts. What Does Underwater Mean in Bankruptcy? The term “underwater” means that the value of your home has decreased to a level that is lower than the value of your first mortgage. If this happens, then you may be able to strip this second mortgage lien off during Chapter 13 bankruptcy. For instance, in the court case above, Mr. Caulkett’s first mortgage was for $183,000 and his second mortgage was $47,855. The value of his home at the time of his Chapter 7 bankruptcy filing was $98,000. Despite…
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