Category Archives: Chapter 13 Bankruptcy

Unfortunately, large-scale natural disasters affected hundreds of thousands of Americans in 2017. The Federal Emergency Management Agency (FEMA) reported an historic year of natural disasters. FEMA reported that disasters affected 8% of the U.S. population in 2017.

Inevitably some people filing for bankruptcy protection will be affected by natural disasters. The United States Trustee Program has released considerations that “shall” guide the enforcement activities of bankruptcy trustees in the event of a natural disaster.

Document Requirements

The inability of a debtor to provide required documents because of a natural disaster will not be a barrier to bankruptcy relief.

“United States Trustees shall not file enforcement motions against debtors who are unable, as a result of a natural disaster, to file or produce documents required by the Bankruptcy Code, if they otherwise are eligible for bankruptcy relief. Further, United States Trustees should generally not oppose any reasonable requests filed with the court by debtors seeking relief from filing requirements due to a natural disaster.”

Means Test

When a debtor earns more income than the state’s median income, adjusted for household size, in the six months leading up to filing bankruptcy, there is a presumption of abuse that must be overcome. This presumption can be overcome by running the Means Test and demonstrating that relief under Chapter 7 bankruptcy is warranted.

For debtors who are affected by natural disasters, the bankruptcy trustee is to “consider the adverse impacts of a natural disaster,” and has discretion in deciding whether to file an objection to the bankruptcy.

“In determining whether to file an enforcement action on grounds of presumed abuse, United States Trustees shall consider the adverse impacts of a natural disaster, including a major decline in anticipated income or a major increase in anticipated expenses, to constitute “special circumstances” for purposes of rebutting the presumption of abuse.”

Attendance at the Meetings of Creditors

With rare exception, every person who files for bankruptcy protection must attend a Meeting of Creditors, also known as a “341 Hearing.” While debtors who have been affected by a natural disaster must still attend the Meeting of Creditors, they may be able to do so in a remote or alternate location. Debtors are still required to be sworn in and to show acceptable personal identification.

“When, due to a natural disaster, debtors are unable to appear personally in the district where the case is filed for the mandatory section 341 meeting of creditors, United States Trustees shall exercise flexibility and offer alternative means for attendance. The debtors, however, must be able to present acceptable personal identification to the individual administering the oath in the alternate location.”

Know that if you have been affected by a natural disaster and have filed bankruptcy or are about to file for bankruptcy, the United States Trustee Program has enforcement guidelines in place to help you.

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The Law Office of Barbara B. Braziel helps people get out of debt. We offer free consultations to people of Savannah, GA and the surrounding areas, including Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Ludowici, Springfield, Pembroke, Brooklet, and Garden City.

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

If you own a home and are considering filing for bankruptcy protection, you likely have many questions about how your home and mortgage will be affected by filing. First, understand that every bankruptcy case is unique and your options and how you will be affected is specific to your circumstance. Second, the following is information generally – to explore how bankruptcy will affect you specifically we encourage you to consult with a bankruptcy attorney. We offer free consultations to anyone in or around the Savannah, GA area.

How Does Bankruptcy Affect My Mortgage?

The mortgage on your house has two elements: your personal liability to pay back the money you borrowed and the lien attached to the house as collateral.

• The promissory note you signed when you took out the mortgage includes the borrowing terms, interest rate, and other legal provision of the loan.
• The lien your mortgage lender has on your home grants the lender the right to foreclose on your home (take back the property) in the event that you default on loan payments.

After a successful Chapter 7 bankruptcy filing, you would no longer be personally liable to pay back your mortgage. However, the lien against your house still exists and your lenders right to foreclose if you default on payments survives bankruptcy. Chapter 13 bankruptcy does not erase your personal liability on your mortgage, and similarly, the lien against your house still exists as well as the lenders right to foreclose.

If you want to keep your house, you must continue to make your monthly mortgage payments to the lender. You must also get current on any missed mortgage payments.

Also, you may want to consider the pros and cons of reaffirming your mortgage during a Chapter 7 bankruptcy. This means you would sign paperwork that reaffirms your personal liability on the debt. There are other implications of reaffirmation agreements as well, which we will explore during our free consultation.

Alternatively, if you do not want to or cannot keep your home, you have the option to surrender your home and erase the debt. You would no longer be liable to pay back the mortgage or liable to pay back any deficiency resulting from what the house sells for versus the amount that you owed on the loan.

Bankruptcy is a complex and nuanced area of law. To have your questions about bankruptcy in Georgia answered, come meet with us for a free consultation. We proudly serve the people of Savanna, Chatham County, Effingham County, Bulloch County, Bryan County, Liberty County, and Long County.

Call us today at (912) 351-9000 or contact us to schedule a free consultation.

The Law Office of Barbara B. Braziel has over 37 years of bankruptcy experience. We are the premier bankruptcy law firm in Savanna, GA and we practice exclusively in bankruptcy law. We invite you to get to know us here and read about the clients we’ve helped here.

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

Just as some debts are treated differently in bankruptcy – some debts can be discharged (erased) in bankruptcy and some cannot – so too are creditors treated differently in bankruptcy.

Whether or not a creditor will be paid in bankruptcy depends on the type of debt, the chapter of bankruptcy filed, and whether the debtor has unexempt assets.

• In a no asset Chapter 7 case there are no funds, nothing for the trustee to seize and sell, so there is nothing to pay creditors.
• In a Chapter 13 a repayment plan is created, and creditors will be paid in a certain order of priority. Some creditors may be paid in full while some creditors are paid only a portion of what they are owed, or nothing at all.

The U.S. Bankruptcy Code sets forth the order of priority established for creditors who are owed money. 11 U.S.C. § 507. Some creditors will be paid before others, if creditors are paid at all. Creditors are divided by classes, and each class is paid in full before the next class is paid. If there is not enough money to pay each creditor in a class in-full, then each member of that class will receive a pro-rata share of the amount they are owed.

Creditors are paid in the following order of priority:

• The bankruptcy trustee assigned to administer the case.
• Unsecured Priority Claims
  • Domestic support obligations – any back spousal or child support obligations owed at the time the bankruptcy case is filed.
  • Certain income tax debts.
  • Criminal fines.
• Secured Creditors
  • Creditors who hold a lien on property in the possession of the debtor, such as a mortgage lender or car note lender.
  • In a Chapter 13 plan a debtor may pay back mortgage arrears or missed car payments in full during the life of the plan.
• Unsecured Nonpriority Claims
  • Credit card debts.
  • Medical debts.
  • Personal loans and student loans.

Unsecured nonpriority claims are last to be paid back from funds distributed from liquidating assets in a Chapter 7 or from Chapter 13 plan payments. These creditors may be paid back in full, or partially based on a pro-rata share, or not at all.

Working with Our Law Office

The bankruptcy team at The Law Office of Barbara B. Braziel  are committed to helping people get out of debt and gain the financial freedom they deserve. All we do is bankruptcy law. We invite you to learn more about who we are here. If you live in Savannah, GA or the surrounding areas and have questions about your debt relief options, let’s meet for a free consultation.

Please reach out to us at (912) 351-9000 or contact us by filling out this simple web form.

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

The majority of people who file for bankruptcy don’t want to. Though, they realize that their debt is out of control and that filing for bankruptcy is the right choice to take control of their finances and get out of debt. Filing for bankruptcy is a serious financial decision, but it may be the best financial decision.

When you file for bankruptcy there are a few things that you must do. One of your responsibilities is to gather the necessary documents. There are documents that the bankruptcy trustee will require, and there are documents that your attorney will need to complete your bankruptcy petition and schedules.

For some people one of the most daunting tasks in the bankruptcy process is gathering the necessary documents. If this is your experience, our advice is to take it one document at a time. You do not have to find all of them at once.

Documents You Must Gather Before Filing Bankruptcy

• 6 months of pay stubs;
• 6 months of documentation of other sources of income (if applicable);
• 6 months of profit & loss statements (if self-employed or you own a business);
• Copies of your bills and documentation of other debts you owe;
• Copy of your most recent mortgage statement(s);
• Copy of your most recent car loan statement(s);
• Copy of your federal and state income tax return or a transcript of the return, for the most recent filed year ending immediately before your case is filed;
• Copies of paperwork in regard to: pending lawsuits, wage garnishment, bank levies, foreclosure on real property, or repossession notices;
• List of all bank and credit union accounts;
• Record of any interest you have in an individual educational retirement account or under a qualified state tuition program; and
• Certificate of completion for pre-filing credit counseling.

With the above documents your attorney will be able to complete your bankruptcy petition and schedules, or at least the majority thereof.

Our Bankruptcy Law Firm Offers Free Consultations

All of us here at the Law Offices of Barbara B. Braziel are here to help you end your financial struggle and gain financial freedom. We offer free consultations. Contact us at (912) 351-9000 today!

We proudly serve the people of Savannah, GA and the surrounding areas, including Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Ludowici, Springfield, Pembroke, Brooklet, and Garden City.

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

The two common chapters of bankruptcy that individuals and married couples file are Chapter 7 and Chapter 13. Both offer many of the same benefits, though they operate very differently. Which chapter is the right debt relief solution for you is specific to the facts of your case.

Chapter 7 bankruptcy is generally the quickest form of bankruptcy, erases all or most of your debts, without a repayment plan, and in general allows you to keep most or all of your personal belongings.

Chapter 13 bankruptcy is a reorganization of debts, creates a three to five year repayment plan, and also allows you to keep most or all of your personal belongings. The Chapter 13 repayment plan gives you a chance to catch up on mortgage arrears, missed car payments, back taxes, and other debts. To qualify, you must have a steady source of income.

Switching Chapters: Converting Your Bankruptcy Case From One Chapter to Another

If your situation changes after filing for bankruptcy, you can ask the court to convert (to switch) your case to another bankruptcy chapter. You must meet the eligibility requirements of the new bankruptcy chapter and get court approval for the conversion.

To ask the bankruptcy court permission to convert from one chapter of bankruptcy to another, your bankruptcy attorney will file a motion with the court. So long as you qualify, have good reason to convert your case, and the court believes you’re not using the system inappropriately, then the judge should likely grant your motion for case conversion.

Converting from Chapter 13 to Chapter 7

A Chapter 13 plan lasts for three to five years, depending on your specific case. A lot can happen during that time. If you lose your ability to pay the monthly plan payment, then you may decide converting to a Chapter 7 is best. Or, perhaps you are catching up mortgage arrears in your Chapter 13 plan, and you later realize you truly cannot afford to keep your house, then converting to a Chapter 7 may be worth exploring.

Converting from Chapter 7 to Chapter 13

You may consider switching from Chapter 7 to Chapter 13 bankruptcy for a number of reasons. For example, if the bankruptcy trustee plans to sell property that cannot be exempt (protected) in bankruptcy, you can convert your case to a Chapter 13 and pay for your unexempt property through your plan. Or, perhaps you had a difficult time passing the means test prior to filing and you fear the bankruptcy trustee may move to dismiss your Chapter 7 case.

It is not uncommon for a debtor’s situation to change after filing for bankruptcy, which would warrant a case conversion. Also, in some cases, new information is discovered during the bankruptcy which makes converting the case a wise decision. The bankruptcy court is likely to approve your first request for a case conversion so long as the conversion is done in good faith and you qualify for the new chapter of bankruptcy you’re seeking.

If you are in bankruptcy and are wondering if converting to a different chapter is the right move, we urge you to contact your bankruptcy attorney to discuss the details of your case.

Free Bankruptcy Consultation

Here at the Law Office of Barbara B. Braziel we offer free consultations to anyone in Savannah, GA and the surrounding area. We are knowledgeable and experienced attorneys who specialize in bankruptcy and debt relief. We have over 35 years of experience. We’ve helped thousands of people get out of debt and have the fresh financial start they deserve.

Contact us here or call (912) 351-9000 to schedule your free consultation.

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.

The U.S. Bankruptcy Court for the Southern District of Georgia recently ruled on a case that questioned whether Social Security Income may properly be excluded from current monthly income, and hence not considered in projected disposable income in a proposed Chapter 13 plan payment amount.

The Trustees Objection

The Chapter 13 Trustee objected to confirmation arguing that Richard P. Green’s (Debtor) Chapter 13 plan was not filed in good faith because Debtor is not contributing his Social Security Income into the plan. In Re: Richard P. Green, 17-11119. Further, Trustee argues that Debtor incurred several secured debts totally over $6,000 in the months immediately preceding the bankruptcy filing date. Id 3. These six creditors are listed in Debtor’s bankruptcy schedules as having claims secured by TVs, but Debtor omitted the date that each debt was incurred. Id. 2. Also, Debtor’s plan proposes to pay 0% to his unsecured creditors.

Debtor excluded his $975.00/month SSI from his income on Schedule I. He included a notation claiming that SSI is not “current monthly income.” Id. 2.

Over the 36-month period of Debtor’s Chapter 13 plan he will retain $35,100.00 in SSI while paying his unsecured creditors nothing. Id 3. The Trustee argues that “the totality of the circumstances in this case require a finding that Debtor’s proposed plan lacks good faith.” Id. 5. The Court must consider whether this plan has been proposed in good faith.

The Court’s Holding

The Bankruptcy Court held that it was not bad faith for Debtor to exclude his Social Security Income because “Social security benefits are expressly excluded from current monthly income[,]” in the Bankruptcy Code. 11 U.S.C. § 101(10A)(B).

Debtor’s exclusion of his SSI is expressly allowed by the Code and therefore cannot constitute a lack of good faith. However, the Court quoted Judge Drake in a recent case in the Northern District of Georgia stating “the ‘optics of the situation are not pleasant, and that does raise a specter of unfairness’ to allow Debtor to amass such funds while paying a 0% dividend to his unsecured creditors.” Id. 9 citing In re Ogden, 570 B.R. 432, 438 (Bankr. N.D. Ga. 2017). The Court ultimately found that it “should not substitute its judgment for that of Congress.” Id. 10.

Trustee’s Other Good Faith Concerns

The Court was unable to make a determination as to the Trustee’s other good faith concerns because Debtor did not address Trustee’s arguments. Id. 11. Trustee’s objection to confirmation was denied in part and a continued confirmation hearing set so that the Court can consider the remaining good faith issues. Id. 12.

The Takeaway

The issue is not Debtor excluding his SSI from his current monthly income calculation. The unresolved issues involve Debtor proposing to pay 0% to unsecured claims, and the secured debts incurred in May, June, and July, immediately before Debtor filed for bankruptcy on July 31, 2017.

Bankruptcy is Confusing, We’re Here to Help

At the Law Office of Barbara B. Braziel we file hundreds of Chapter 7 and 13 bankruptcy cases every year. But our clients are never just a number. You will not be left in the hands of a paralegal. You will have access to your attorney throughout your bankruptcy case.

We are here to give you the fresh start you deserve. Call us today at (912) 351-9000 or contact us via the web to schedule a free consultation.

We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.