How has the bankruptcy laws changed for private citizens, i.e. chapter 7, 11 and 13 I think...?

Asked about 3 years ago - Stone Mountain, GA

I am facing a foreclosure and have been working with bank of america but now they have sent it to attorneys

Attorney answers (5)

  1. Ian Marc Falcone

    Contributor Level 9

    1

    Lawyer agrees

    Answered . The changes to the Bankruptcy Code in 2005 were substantial. In general, they made it more difficult to file a Chapter 7 case by instituting the "means test" which is basically a fairness test. However, most of our clients still qualify under that chapter. Individual Chapter 11 cases were changed slightly and now resemble individual chapter 13 cases in many ways; in particular a 5 year repayment is now required. Chapter 13 was made more "formulaic" in determining how much money must be paid to unsecured creditors.

    These are obviously only the very basic changes. What is important is not how the laws changed, but how they can be used today to help you.

    You mention foreclosure in your question. Bankruptcy is sometimes an answer to foreclosure, but it depends tremendously on your goals and financial situation. It is best to consult with a local attorney to see if bankruptcy is the right solution for you.

  2. Glen Edward Ashman

    Pro

    Contributor Level 20

    1

    Lawyer agrees

    Answered . A list of all the 2005 changes would take a few hundred pages.

    The good news is that most people who may need to file bankruptcy still can, and that bankruptcy can be a useful tool to prevent or delay foreclosure and preserve a home, or, if you're real upside down, to walk away from a home, and, in a few cases, even to wipe out 2nd mortgages.

    Few individuals do Chapter 11. But without financial details no one can tell you what would or might work for you. Even if you decide not to file, it is smart to evaluate options long before a foreclosure. Many lenders, and sadly Bank of America is now one of the nation's worst, will string you along until it is too late to look at other options.

    See a lawyer, be it us or someone else, to know all your rights and options. Do not wait until very close to the foreclosure date. Good luck!

    In answering questions on AVVO, the law office of Glen Ashman is not undertaking to represent you, and you should... more
  3. Glen Edward Ashman

    Pro

    Contributor Level 20

    1

    Lawyer agrees

    Answered . A list of all the 2005 changes would take a few hundred pages.

    The good news is that most people who may need to file bankruptcy still can, and that bankruptcy can be a useful tool to prevent or delay foreclosure and preserve a home, or, if you're real upside down, to walk away from a home, and, in a few cases, even to wipe out 2nd mortgages.

    Few individuals do Chapter 11. But without financial details no one can tell you what would or might work for you. Even if you decide not to file, it is smart to evaluate options long before a foreclosure. Many lenders, and sadly Bank of America is now one of the nation's worst, will string you along until it is too late to look at other options.

    See a lawyer, be it us or someone else, to know all your rights and options. Do not wait until very close to the foreclosure date. Good luck!

    In answering questions on AVVO, the law office of Glen Ashman is not undertaking to represent you, and you should... more
  4. Stephen Craig Hinze

    Contributor Level 11

    1

    Lawyer agrees

    Answered . There was a big revision in 2005 that made it harder to file chapter 7. A means test was implemented that created a presumption that a debtor was abusing the code if their income was above a certain level. That level is different in different states and it varies with the number of people in the family. Chapter 13 allows you to keep your assets but puts you on a repayment plan. You get to keep your stuff but you nave to pay your creditors the greater of what they would receive in a chapter 7 or all of your disposable income over a three to five year period. It gives you a chance to pay off any default penalties over the period and you need to keep your mortgage payments current. It can help you keep your house, especially if eliminating or reducing your unsecured debt would free up enough cash flow to keep the mortgage current. Individuals do not usually use Chapter 11 unless they exceed the debt limits for chapter 13. those limits are no more than $360,475 in unsecured debt and $1,081,400 in secured debt. Hope this helps. Good luck!

    The ideas and opinions expressed in this comment are generalities only and not based upon a thorough analysis of... more
  5. Stephen Clark Harkess

    Pro

    Contributor Level 20

    1

    Lawyer agrees

    Answered . Your question is very broad. You need to discuss your specific situation with an attorney to determine how to proceed.

    Usually, a Chapter 13 case gives you the most afordable options for stopping foreclosure. A Chapter 7 case will only delay foreclosure unless you can catch up the arrears. A Chapter 11 case is much more complicated and far more expensive then a Chapter 13, so it usually doesn't make sense unless you do not qualify for either of the other chapters.

    You can reach Harkess & Salter LLC at (303) 531-5380 or info@Harkess-Salter.com. Stephen Harkess is an attorney... more

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