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

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

Posted

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 your situation or the law that might apply to you. As such they are intended to be general guidance and not legal advice. Use this information to assist in your analysis as to what you want to ask an attorney when seeking legal advice, Nothing stated herein shall be deemed to create an attorney-client relationship with you nor legal advise for you to use.

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Posted

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 licensed in the state and federal courts of Colorado. This answer is for general information only and does not create an attorney client relationship between Stephen Harkess or Harkess & Salter LLC and any person. You should schedule a consultation with an attorney to discuss the specifics of your legal issues.

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Posted

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.

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Posted

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 consider hiring counsel to assist you. In that answers here are based on brief and limited information there may be facts that would affect the accuracy of an answer here, so again, hiring counsel is always prudent. If you are in the area and wish to retain Mr. Ashman, you will need to call for an appointment and sign a retainer agreement.

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Posted

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 consider hiring counsel to assist you. In that answers here are based on brief and limited information there may be facts that would affect the accuracy of an answer here, so again, hiring counsel is always prudent. If you are in the area and wish to retain Mr. Ashman, you will need to call for an appointment and sign a retainer agreement.

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