Articles Posted in Chapter 13 Bankruptcy

Chapter 13 Bankruptcy is also known as “wage earner” bankruptcy because, in order to file for Chapter 13, you must have a reliable source of income that you can use to repay some portion of your debt. It has also been known as the “consolidation” bankruptcy because it allows you to consolidate the debts you want to keep into one payment while still wiping out the debts that you do not wish to keep. You decide the keep and don’t keep. When you file for Chapter 13 bankruptcy, you must propose a repayment plan that details how you are going to pay back your debts over the next three to five years. The minimum amount you will have to repay depends on how much you earn, how much you owe, and how much your unsecured creditors would have received if you had filed for Chapter 7 bankruptcy. Your bankruptcy attorney will help you work out this plan.If you have secured debts such as a mortgage or vehicle, Chapter 13 gives you an option to make up missed payments to avoid repossession or foreclosure. You can include these past due amounts in your repayment plan and make them up over time. If you have unsecured debts such as credit cards, medical bills, payday loans, etc Chapter 13 still allows for these debts to be wiped out. If you are facing garnishment, a Chapter 13 will stop such creditor actions. A chapter 13 case begins by filing nearly the exact same set of forms as in a Chapter 7 bankruptcy. The court filing fee is $313. In Mississippi, the attorney fee is determined by the court. The individual attorneys decide how much up front of their fee they wish for you to pay. Our standard amount up front is $500, making it a total of $813 up front to file a Chapter 13 case. When you speak to the attorney, they will discuss your specific situation with you and are always up front about any and all costs associated with your case.

Americans In Record Debt – Credit Card Debt Passes $1 trillion

Published on: August 16, 2023 | Frank Coxwell

Americans are in record debt – for the first time ever, credit card debt passes $1 trillion! Along with the skyrocketing of the country’s national deficit, a debt crisis is hovering over the private sector. New information shows Americans are more in debt now than at any point in history. According to the Federal Reserve, for the first time in our nation’s history, American credit card debt flew past the $1 trillion mark, with $250 billion in the last two years alone and $45 billion in the last quarter alone. Just to put this into context, American credit card debt is now larger than the GDP of all but 17 countries on earth. Wow.

Even though some may think that reckless spending habits might play some role in this, the reality is that more and more Americans are being forced into credit card debt trying to pay off monthly living expenses. Over the last two years, as inflation has taken hold of the economy, the cost of necessary goods has hit the roof. A newly released report from Moody’s shows that the average American family pays $709 more now each month for the same goods they were purchasing in 2021. With around 60% of Americans living paycheck to paycheck and 54% saying they wouldn’t be able to cover an unexpected $400 payment, it only takes a small monthly change to drive people into debt just to make ends meet. Another side effect of the Fed’s continuous rate hikes, the average credit card interest rate is now around 20% (which is the highest mark on record), translating to the cost of that debt being even higher.

Keep in mind that one of the fastest ways to negatively impact your credit score is to max out your credit card debt. It doesn’t matter that you’re paying on time nearly as much as it matters that you have maximized all available credit limits. If you are only paying minimum credit card payments monthly, you will be paying on that credit card debt for years and years. It will take a long time to ever pay down this debt, even enough to the point to regain traction on your credit score. One small change in your income or overall financial situation can then cause late payments, which tank your credit score even further. Without a decent credit score, lenders are unwilling to provide you with debt consolidation loan options. Or if they do, they are at enormous interest rates. Many consumers, over the past two or so years, have consolidated their credit card debt only to then again run up the credit cards that were paid off in the consolidation.

Student Loan Payment Freeze Ending -What Now?

Published on: August 11, 2023 | Frank Coxwell

As a result of legislation enacted by Congress, the student loan payment freeze is ending. Student loan interest will resume Sept 1, 2023. For most, payments will be due in October 2023. It is expected that nearly half of borrowers are unable to begin making payments again. Many people are simply not in a stable enough position to begin with these payments at this time. One in five borrowers are facing monthly payments over $500! Another survey stated one out of four will have to consider putting off buying a house or getting married in order to begin payment on their student loans again.

If you are entering repayment or beginning your student loan payments for the first time, there are 3 things you should do now.

Make a budget – take a hard look at your monthly income and expenses.

Can you buy a new or used vehicle while you are in a chapter 13 bankruptcy?

Published on: December 16, 2017 | Frank Coxwell

Yes! First of all, you can buy anything for cash, no permission is needed – but – you need written permission from the court to get a new loan or new credit while you are in a chapter 13 bankruptcy. The court wants to make sure you are not doing something that will jeopardize your ability to complete your chapter 13 Plan.

1. Find a dealer or car lot that is willing to sell you a vehicle and can get you financed.

Before anything is finalized, I will need the details of the sale; the year, make, and model of the vehicle, the selling price, the amount of the monthly payment, the interest rate, and the total cost. You (or the dealership) can email or fax this information to me.

What do you do if you are in a chapter 13 bankruptcy and your vehicle is not worth keeping?

Published on: December 15, 2017 | Frank Coxwell

If you are in a chapter 13 bankruptcy and are paying for an older vehicle, sometimes the vehicle (or one of them) that you are paying for just isn’t worth keeping anymore. It may have completely stopped running or require repairs to continue running that are more expensive than the vehicle is even worth. You have options. You may be able to drop it from your bankruptcy case, lower your bankruptcy payment, and walk away from the vehicle that is no longer worth keeping.

1. Send me an email or fax telling me you want to surrender the vehicle and drop it from the chapter 13 plan, and tell me which vehicle.

2. I will file a motion with the court to modify your plan and to remove the vehicle from your plan and reduce the monthly payment. This will take thirty days (30) from the date the motion is filed.

What do you do if you are in a Ch13 and involved in a car accident?

Published on: December 14, 2017 | Frank Coxwell

If you are in a bankruptcy chapter 13 case and are involved in a car accident, it is so important for you to follow the proper steps required by the Bankruptcy Court. It doesn’t matter if your vehicle was totaled or not, there are steps we must take to handle things properly.

Let the insurance company know you are in a chapter 13 bankruptcy and tell them any settlement for the damage to the vehicle must be paid to the chapter 13 trustee. Do not cash or deposit any settlement money or checks you receive. All money must be paid to the chapter 13 trustee.

If you hire an attorney to represent you for injuries you received in the accident, the attorney must be approved by the bankruptcy court. If you need a lawyer to represent you, call my office, I can refer you to an attorney.

Are you getting your Tax Credit for Mortgage Interest paid in your Chapter 13?

Published on: August 31, 2017 | Frank Coxwell

Is your Chapter 13 plan paying mortgage payments that were delinquent when you filed bankruptcy? Is your Chapter 13 plan paying the current mortgage payments through the bankruptcy? If so, you are missing out on your mortgage interest tax deduction.

Your mortgage company often won’t send the IRS or the trustee the Mortgage Interest statement each year for what you paid through the plan.

So you don’t have any proof that mortgage interest was paid, and neither does the IRS.

Here is how you can claim the credit for mortgage interest: Continue Reading ›

What can a Chapter 13 bankruptcy do for me?

Published on: January 30, 2015 | Frank Coxwell

A Chapter 13 bankruptcy will work wonders on your debts and help to place you in control of the creditors. Chapter 13’s help manage your debt obligations for a period of 3-5 yrs by a repayment plan. You work with your bankruptcy attorney to submit a plan on restructuring your debt; making it easier for you to pay. In addition, the Chapter 13 Plan addresses whether or not you pay anything towards unsecured debts. Depending on your situation and desire, you could pay anywhere from 0% to 100%. Debts and bills overpowering you are now under control and reduced to an affordable amount. This is an option available to you that offers a lot of benefits and puts you in the driver’s seat.

There are many benefits and advantages of filing a Chapter 13 in MS. Here are a few:

If you have become behind on your mortgage payments, you can get caught up on the missed payments and stop the foreclosure.

Can I get my Chapter 13 Plan payments lowered?

Published on: December 7, 2012 | Frank Coxwell

Possibly, but first you need to understand that a Chapter 13 plan is not based on your income. It does not fluctuate depending upon how much you make. The Chapter 13 plan amount depends upon what you plan on keeping and/or what creditors you plan on paying through the bankruptcy. For example, if you are paying for only your home through your plan, the amount of the payments will be based upon the mortgage amount then that amount spread out over the life of the plan to catch up your back notes. This amount won’t change unless your mortgage note happens to change.

However, if you are paying for several things – such as a student loan, a vehicle, a home, and a furniture note – through your Chapter 13 plan, the payments could become lower if you decide to stop paying toward the student loan or decide to surrender a vehicle, or the home, etc.

Since a Chapter 13 plan is dependent upon who you plan to pay and what you plan to keep – you can decide to change (with some exceptions) who you are paying and/or what you are keeping in order to lower the note.

What does it mean to “cram down” a debt in a Chapter 13?

Published on: July 11, 2012 | Frank Coxwell

First you should understand that when we talk about “cramming down” a debt, it is referring to a secured debt (such as debts for vehicles, furniture, household goods and appliances). Referring to a debt as secured means there is some type of collateral attached, which you would lose if you defaulted on the debt.

All secured debts can be stretched out in a Chapter 13 up to the 5 year max period. This is often helpful by lowering the note. However, you may find even more benefit within a Chapter 13 regarding secured debts through a “cram down”.

“Cram down” of debt means that you can reduce the amount you must pay to be equal to the current value of the collateral rather than the current amount owed if certain criteria is met.

Is Chapter 13 The Right Choice For You?

Published on: September 23, 2011 | Frank Coxwell

First of all, discuss your situation with a competent and knowledgeable bankruptcy attorney, preferably one who only represents consumers. Do it before you do anything thing else, before you pay any creditors or relatives, before you give any property away, before you let the house go, before you take on new credit or sell any of your property.

There are numerous differences between a Chapter 7 Bankruptcy and a Chapter 13 Bankruptcy in Mississippi and many reasons to choose one over the other. Here is a list of reasons why a Mississippi Chapter 13 Bankruptcy might be the best option for you:

A Chapter 13 will save a house from foreclosure.