Chapter 13 Bankruptcy
In contrast to the relatively quick Chapter 7 process, Chapter 13 bankruptcy is a reorganization of a consumer’s finances that allows them to pay back something to creditors over a 3-5 year period based on their income for a family of their size. With the help of a bankruptcy attorney, Chapter 13 filers create a payment plan that allocates their disposable income to make a monthly, consolidated payment to creditors. We’re sure the reader would like to know: what constitutes disposable income? For purposes of bankruptcy, disposable income means what you have left over after subtracting allowed expenses from your gross earnings. Some expenses will be determined by your actual out-of-pocket costs; others will be set by national local standards as calculated by the IRS. The less disposable income you have, the lower the percentage of unsecured debts you pay back to creditors throughout the life of your Chapter 13 plan. At the end of the process, debts that remain outstanding are discharged.
Household Debt Near Great Recession Level: What Does it Mean?
Although bankruptcy filings have been trending downward for years, household debt is expected to hit a new record in 2017. It may seem like a big number, but fewer than 800,000 people filed for bankruptcy in the U.S. last year. Just six years ago, that amount was double. Will household debt start to catch up…Read more
4 lessons from 50 Cent’s bankruptcy case
A federal judge recently discharged the bankruptcy case of rapper 50 Cent after he paid more than $22 million of his debt. 50 Cent filed for Chapter 11 reorganization in 2015, with debts of $36 million and assets of less than $20 million. The “Get Rich or Die Tryin’” artist, whose real name is Curtis…Read more
How many people filed for bankruptcy in 2016?
Bankruptcy filings are continuing to decline, with fewer than 800,000 people filing in federal courts last year. All bankruptcy cases are handled in federal courts, per the U.S. Bankruptcy Code. Although 800,000 seems like a lot, it pales in comparison to the height of the economic collapse in September 2010, which saw nearly double the amount…Read more
What Does Bankruptcy do to Credit Scores?
When you’re in debt and trying to decide what action to take, you may be concerned about how to protect your credit score. That’s often one of the last barriers to deciding to file for bankruptcy – what will this do to my credit? The answer may surprise you. Bankruptcy certainly does have an effect…Read more
Can I pay back family before bankruptcy?
In times of difficulty, we naturally turn to family and friends for help. The same holds when those difficulties are financial. Family and friends know you and understand your troubles; they’ll be willing to lend you a hand even when banks won’t. They trust you regardless of your credit score. If you borrow from people…Read more
Gift or Loan, and Why Does It Matter for Bankruptcy?
Last updated May 31, 2017. When you’re struggling with debt, it’s natural to turn to friends and family for help. They know you and they trust you, making it simpler and easier to seek financial aid from them than from a bank. If your financial difficulties continue and you decide to file for bankruptcy protection,…Read more