Just because you don't meet the income requirements to filing a Chapter 7 bankruptcy doesn't mean you can't file Chapter 7. If you really want to eliminate your debt and start over see if you can rebut the presumption that you don't qualify. If you expenses show you doesn't have enough money to pay back creditors you may very well be able to qualify for a Chapter 7.
If you are concerned with your child college education, do not that a Chapter 13 plan you usually cannot consider taking out any more college loans for you child or paying college expenses other than student loans that already exist. Thus be careful if you children are close to college. Take in detail to your attorney about this.
Tip 7 & 8
Length of payment plan. If your over the presumptive income you must have a 60 month plan. However, if you are under the presumptive inome you can have a plan that is as short as 36 months. You may consider increasing the number of months of your plan in order to keep you payments lower. Also you may consider having your payments at 55 or 56 months incase you miss a payment and then have to make it up by pushing your plan out to 60 months.
Tip 5 & 6
Considers the monthl payments amount and make sure its feasable for you to make the payment. You may have a payment that at 36 months is 200 more per month than one at 60 months and 100 more than one at 48 months. Also consider possible using 50% of you tax return to payback during your payment to keep you payments low. Trustee will almost always take 50% of your tax refund (if above $1000) so why not considering just proposing to pay it in the plan to keep your payments done.
Expenses - make sure to have documents to back up any expense such as charitable giving, medical bills that are larger than the presumptive amount, high transportation expenses due to driving many miles for work. Having this information up front will help answer questions that the Trustee may have.
Auto loan that is more than 910 days old. Cramdown the loan to the value of the auto. NADA retail value is used by the Courts, but you may consider offering less due to repairs necessary, condition etc in your cramdown. This can lower you car payment down substantially, when you only pay back 8000 at 4.75% compared to 15000 at 16.75%.
Even if you auto loan is not 910 days old, you may consider paying back the entire loan amount over the life of the plan. This will allow you to pay a lower monthly payment and at a possible lower rate (currently 4.75%), thus allowing you to still keep your auto and making your overall monthly expenses (auto pmt and plan pmt) less.
2nd Mortgages. If you an show that value of the clients home is worth equal to or less than the 1st Mortgage, then you can request the Bk Court allow you to avoid the lien created by the 2nd mtg. This will allow you to keep your home and not have to pay back the 2nd mtg, as it will be considered to be unsecured like a credit card and thus require as little as pennys on the dollars to repaid on said loan.
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