Under limited circumstances, a creditor may be able to block a bankruptcy discharge of his debt. For example, if a creditor can prove that he gave a loan in reasonable reliance on a financial statement which was false in important details and given with the intent to deceive him, he may avoid having the debt discharged. If a creditor tries to avoid the discharge for this reason and fails, the bankruptcy judge may order the creditor to pay for the debtor’s attorney fees and costs in defending the action.
These are just examples of problems that may occasionally arise in a bankruptcy proceeding. They are among the many matters which you should discuss in detail with your attorney prior to filing for bankruptcy.
A U.S. bankruptcy judge is a judicial officer of the U.S. district court who is appointed by the majority of judges of the U.S. court of appeals to exercise jurisdiction over bankruptcy matters. The number of bankruptcy judges is determined by Congress. The Judicial Conference of the United States is required to submit recommendations from time to time regarding the number of bankruptcy judges needed. Bankruptcy judges are appointed for 14-year terms. More information on Utah Bankruptcy can be found at www.dlblaw.com
In recent years the United States has seen the basic expenses of living – gas, food, medical care – skyrocket. Combine that with an unprecedented increase in foreclosures – up 48% from May 2007 to May 2008 – and millions of people are struggling to make ends meet. Some of the hardest hit during the economic downturns are those in their retirement years.
The American Bar Association conducted a survey citing nearly half of those surveyed are worried about making mortgage payments, and 16% have even higher credit and balances than before. And of those surveyed, 39% of those with financial concerns for the future have taken no action.
How does this affect older Americans? Many find themselves in positions they never planned for. 12% more adults over the age of 55 are filing bankruptcy than 13 years ago, and account for nearly 25% of all bankruptcies currently filed.
Retirement aged Americans are not only trying to keep up with their own ever-increasing expenses – such as medical care – they’re also assisting their adult children who are also in financial difficulty. Many find their grown children and grandchildren moving back into their homes, creating a further drain on limited resources.
Compound this with an endless flood of credit card offers. Many retired Americans take on more credit card debt rather than asking for help. Now they’re maxed out with rising interest rates and have no way to pay the balances. Or, they’re taking mortgages or lines of credit out on their homes to pay their bills. In either case, many have fallen for the predatory lending practices.
Now, those who should be enjoying retirement are facing foreclosure and bankruptcy. Born in a generation which believed it was shameful to be unable to pay their bills or file bankruptcy now find themselves rethinking their options. They’ve discovered bankruptcy isn’t a reflection of their character. It’s an economic, legal option for getting out from under a heavy financial burden.
Many retirees find they qualify for Chapter 7 discharge when they finally speak with a local bankruptcy attorney. Social Security benefits are exempt from income restrictions under Chapter 7. Most debt accumulated by senior Americans was accumulated before retirement, or is unsecured debt like credit cards and medical bills. If this is the case, most of the debt can be discharged and change the financial status of the retired person. Not all debt is dischargeable under Chapter 7; a bankruptcy attorney can evaluate your situation and advise you.
Chapter 13 bankruptcy is still an option for those who don’t qualify for Chapter 7 bankruptcy. With Chapter 13 bankruptcy a plan is drawn up to repay any outstanding debt. The plan runs for a minimum of 3 years to a maximum of 5 years, but it allows for the person filing bankruptcy to keep more property. Assets are not sold under Chapter 13; payments are made out of income. This may be a more likely option for senior Americans who may still be working or own their own business.
People of retirement age have worked hard to make a home for themselves and their families. They should be enjoying it. Foreclosure doesn’t have to happen. Bankruptcy can be the way out. Discuss your options with a qualified bankruptcy attorney today. A home is too valuable to lose.
A Chapter 7 filing should have no effect on such collections.
Although filing bankruptcy stops, or stays, all efforts to collect debts, the Bankruptcy Code excludes actions to collect child support or spousal maintenance from the stay unless the creditor attempts to collect from the property of the estate. In a Chapter 7 proceeding, property of the estate includes all possessions, money, and interests the debtor owns at the time he or she files. Money earned after the bankruptcy is filed, however, is not property of the estate. Since most child and spousal support is paid out of the debtor’s current income, the bankruptcy should have little impact.
A debtor under Chapter 13 must pay all domestic support obligations that fall due after the petition is filed. Failure to do so could result in dismissal of the case.
Neither a Chapter 7 nor a Chapter 13 discharge affects future child or spousal support obligations. In other words, even at the conclusion of the bankruptcy proceeding, these on-going obligations remain. More information on Utah Bankruptcy can be found here.
Yes, it’s called “Motion to Convert” and can be done after you’ve filed for either chapter, also note that the trustee can also request a conversion.
For instance, if your chapter 13 fails, either you or the creditor, may request a conversion to chapter 7. Likewise if the trustee thinks money might be available for unsecured creditors they may make a motion to convert your chapter 7 to a chapter 13. More information on Utah Chapter 13 Bankruptcy can be found at www.utahchapter13.com.
A bankruptcy “estate” is defined in Title 11 of the United States Code § 541. It is a very broad definition and includes all legal or equitable interests of the debtor in property, wherever located, as of the commencement of the case. It also includes any property in which the debtor has an ownership interest that is recovered by the trustee if it was merely out of the possession of the debtor.
In certain circumstances, property acquired by the debtor within 180 days after the filing of the case may also be considered part of the bankruptcy “estate”. A Utah attorney should be consulted if there is any question as to whether specific property will be included in the bankruptcy “estate” and the Utah exemptions that may be available to the debtor.
The U.S. Bankruptcy Court is part of the federal judiciary. Each of the 94 federal judicial districts handles bankruptcy matters, and in almost all districts, bankruptcy cases are filed in the bankruptcy court. Bankruptcy cases cannot be filed in state court.