Category Archives: Chapter 13 Bankruptcy

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.

Chapter 13 bankruptcy offers powerful protections and benefits to debtors. It is a legal tool that can help people get control of their finances and get out of debt. Chapter 13 creates a three to five year repayment plan, giving the debtor the opportunity to reorganize and pay back a portion or all of their debt over time. While in Chapter 13 bankruptcy you must make an agreed upon monthly plan payment to the bankruptcy trustee.

Of course, three to five years is a lengthily commitment. What if you need to sell your house, or want to buy a house, during the course of your bankruptcy?

Can I Sell a House While in Chapter 13 Bankruptcy?

Yes, it is possible to sell a house while in Chapter 13 bankruptcy. It is important to understand that the sale will be subject to approval from the bankruptcy court.

You can enter into a listing agreement with a real estate agent or put your home on the market for sale yourself. When you enter into a sale contract, you must include in the contract that the sale will be subject to bankruptcy court approval.

You bankruptcy attorney will need to file a Motion with the court for leave (permission) to sell. The court will then send notice to your creditors, who will be given 14 days to object to the sale. If no objections are timely filed, then the court will note no objections and then you may move forward with closing.

You will not receive money from the sale of your home at the time of closing. The proceeds of sale will be forwarded to the bankruptcy trustee administering your case. The trustee will then distribute to you any proceeds that you are entitled to receive.

It is possible to sell a house while in Chapter 13 bankruptcy, though the process will require the assistance of your bankruptcy attorney. Remember that while you are in bankruptcy you do not want to take any actions that would be harmful to your case. It is critical that you follow the proper Court procedures and Bankruptcy rules to ensure that the sale is approved.

Can I Buy a House While in Chapter 13 Bankruptcy?

Yes, when certain conditions are met, it is possible to buy a house while in Chapter 13 bankruptcy. It is important to understand that you must ask the bankruptcy court permission to take on new debt while in a Chapter 13.

You may be able to buy a house while in Chapter 13 bankruptcy when:

• You have been in Chapter 13 with consistently current payments for 12 months.
• You have no delinquent accounts.
• If you have at least a 620 beacon score you may qualify for a VA or FHA home loan.
• You will need court approval to incur new debt (to get a mortgage). 

If you want to buy a house while in Chapter 13 you will need to contact a loan broker and work with him or her to secure a mortgage. Your loan broker will need a copy of your Chapter 13 payment history and other documents pertaining to your bankruptcy case. Your bankruptcy attorney will be able to provide the documents your loan broker needs.

Once your loan application is approved, you must secure a good faith estimate for what your total loan amount and monthly payment will be. At that point, it is important to take the proper steps to secure court approval. Contact your bankruptcy attorney to help with the process. You will need to provide your bankruptcy attorney with your recent pay stubs (and that of your spouse, if married) and be able to demonstrate that you can afford the estimated monthly mortgage payment.

To learn about buying a house after bankruptcy, read our article Can I Buy A House After Bankruptcy?

Here at the Law Office of Barbara B. Braziel we have over 35-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.

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.

Chapter 13 bankruptcy helps people get a handle on their debt problems while keeping most or all of their personal belongings and other assets. It enables people with regular income to develop a plan to repay all or a portion of their debts over time. The debtor (person who files for bankruptcy protection) proposes a Chapter 13 repayment plan, which must be approved by the bankruptcy court. Then each month the debtor will make the plan payment to the bankruptcy trustee assigned to administer their case. The trustee will then disperse the funds to debtor’s qualifying creditors.

While Chapter 13 sounds complicated, with the help of an experienced bankruptcy attorney it can be a smooth process. As you explore solutions to your debt problem, it is important to understand the facts about Chapter 13 and Chapter 7 bankruptcy.

Chapter 13 Facts

• Your Chapter 13 bankruptcy repayment plan will last three to five years.
  • The plan will last three years if your current monthly income (based on the six months before filing) is less than the state median, adjusted for household size.
  • The plan will last five years if your current monthly income is greater than the state median. Under the U.S. Bankruptcy Code a plan may not last longer than five years. 11 U.S.C. § 1322(d).
• While you are in bankruptcy the law forbids creditors from continuing collection efforts.
  • As soon as you file for bankruptcy protection all collection actions against you must stop, including collection calls, lawsuits, wage garnishments, bank levies, and even foreclosure and repossession.
  • In general, if a creditor wants to move forward with a foreclosure or repossession during bankruptcy it must petition the court for permission.
• You may catch up mortgage payments and car payments you missed prior to filing for bankruptcy.
  • The arrears must be paid back through your Chapter 13 plan.
  • During the course of your bankruptcy you are required to make the monthly payments on your home or car directly to the lender. Only the payment arrears are paid through the plan payments.
• If your home is “underwater” (you owe more on your first mortgage than the fair market value of the home), then you may be eligible to “lien strip” (eliminate) a second mortgage.
• Eligibility for Chapter 13 bankruptcy includes debt limits.
  • Your unsecured debts must total less than $394,725, and
  • Your secured debts must total less than $1,184.200. 11 U.S.C. 109(e).
  • The Chapter 13 debt limits are adjusted periodically, though the above numbers are current through 2018.
• So long as all requirements are met, at the conclusion of your bankruptcy case any remaining dischargeable debt will be erased, including credit cards, medical bills, personal loans, old tax debts that meet certain criteria, and other types of unsecured debts.

Filing for Chapter 13 bankruptcy can be your chance to get your financial life in order. Once you are out from under the burdensome weight of debt, you are empowered to make wise financial decisions for your future.

We Will Help You Through Your Chapter 13 From Start to Finish

It is our mission to ensure that you understand the power and benefits of Chapter 13 bankruptcy. Filing for bankruptcy is a serious financial decision. If you are feeling apprehension about the process, we understand. Know that if you hire us to file your bankruptcy case, we will be by your side from start to finish. We will prepare your bankruptcy petition and Chapter 13 plan, file it with the court, and assist you until the end of your case.

Contact us to explore how bankruptcy can help you! We offer free consultations to anyone in or around Savannah, GA looking to explore how to get out of debt.

Reach out to us by email at info@BrazielLaw.com or call (912) 351-9000.

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

Once you determine that filing for bankruptcy protection is the right debt-relief solution for you, it is important to explore which chapter of personal bankruptcy would be of most benefit to you. Every bankruptcy case is unique and your specific situation, along with your goals, will help determine whether Chapter 7 or Chapter 13 is right.

Chapter 7 bankruptcy is the most common chapter, generally the quickest and simplest, and is typically completed in four to six months. While that sounds enticing, Chapter 13 offers benefits to debtors that are not available to debtors who file for Chapter 7 bankruptcy.

For people who do not qualify for Chapter 7, or who would otherwise benefit from additional protections, filing for Chapter 13 bankruptcy may be the right option.

Additional Benefits of Chapter 13 Bankruptcy

Chapter 13 bankruptcy creates a three to five year repayment plan, allowing debtors to pay back some, none, or all of their debt, depending on their specific situation. Because a monthly payment is required, to qualify for Chapter 13 you must have a steady source of income.

The additional benefits of Chapter 13 not available in Chapter 7 include:

Catch up on mortgage arrears: Missed mortgage payments from before the date you file for bankruptcy can be included in your Chapter 13 plan. This gives you the opportunity to catch up on your mortgage arrears and save your home from foreclosure. During the course of the Chapter 13 case you will have to continue to make your regular monthly mortgage payment as it becomes due and the monthly Chapter 13 plan payment to the Bankruptcy Trustee.

Eliminate an underwater second mortgage: Debtors with underwater homes may be eligible to completely eliminate a second mortgage with a lien strip. To be eligible for a lien strip, the first mortgage on your home must be underwater (meaning you owe more on the first mortgage than the home is worth). A second mortgage or other eligible liens are only stripped after completion of the Chapter 13 bankruptcy plan.

Make up missed car payments: Missed car payments from before the date you file can be included in your repayment plan. This gives you the opportunity to save your car from repossession. Similar to home mortgage payments, during the course of the Chapter 13 case you must continue to make your regular monthly car payment and the monthly bankruptcy plan payment.

In Chapter 13 bankruptcy, each month you are required to make a payment to the Bankruptcy Trustee assigned to your case, then he or she distributes those payments to your mortgage lender, car note holder, and other creditors to whom you owe money.

Filing for Bankruptcy Protection

To explore which chapter of bankruptcy would be right for you, we invite you to meet with us for a free, no-obligation consultation. Here at the Law Office of Barbara B. Braziel we will make sure you understand the protections and benefits of bankruptcy and how filing with affect you and your family.

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

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.

For many of our clients bankruptcy at first feels like a scary thing, but once they understand the protections and benefits of bankruptcy they feel much more comfortable with their decision to file. Bankruptcy is a financial decision and a powerful legal tool.

The Benefits of Bankruptcy

Bankruptcy offers a number of benefits. The main benefit is relief from debt. Bankruptcy has the power to eliminate debts, including credit cards, medical bills, certain older tax debts, personal loans, and other types of credit or loans that were given without a collateral requirement. After a successful filing you are no longer legally obligated to pay back your dischargeable debts.

Also, bankruptcy allows you to erase debts while retaining most or all of your assets and personal belongings. For example, ERISA qualified retirement accounts are fully protected in bankruptcy. Also, depending on your specific situation you will most likely be able to keep your car and your home. Generally speaking, it is more likely that you can keep your car or home if your payments are current and you do not have significant equity.

The Protections of Bankruptcy

The United States Bankruptcy Code affords people who need to file many protections, including:

• The Automatic Stay: a provision in the U.S. Bankruptcy Code that makes it illegal for creditors to attempt to collect on debts from a person who has filed for bankruptcy protection. The Stay becomes effective immediately, as soon as the bankruptcy case is filed.
  • Stops collection phone calls.
  • Stops wage garnishments, bank levies, and lawsuits for unpaid debts.
  • Stops, at least temporarily, foreclosure, repossession, and eviction.
• Protection of property: Bankruptcy law protects exempt property from being seized and sold by creditors. As noted above, the majority of people who file get to keep most or all of their assets and belongings.
• Catch up on mortgage arrears or missed car payments: Chapter 13 bankruptcy creates an opportunity for debtors to catch up on missed mortgage or car payments. Through the Chapter 13 repayment plan, which lasts three to five years, missed payments can be made up. This option enables people to retain their home or car that would otherwise be lost.

The full scope of the legal protections bankruptcy offers is vast. We invite you to come in for a free consultation to learn more about the protections and benefits of bankruptcy.

We Can Help You Get Out of Debt

Here at the Law Office of Barbara B. Braziel we help people get out of debt. We are the premier bankruptcy law firm in Savanna, GA and we practice exclusively in bankruptcy law. Our experienced attorneys are committed to ensuring you understand the protections and benefits of bankruptcy and how filing with affect you and your family. We invite you to get to know us here and read about the clients we’ve helped here.

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

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

If you are exploring if filing for bankruptcy protection is right for you, you may be wondering what type of bankruptcy is right for you. The United States Bankruptcy Code creates “chapters” of bankruptcy:

• Chapter 7: Liquidation Under the Bankruptcy Code
• Chapter 9: Municipality Bankruptcy
• Chapter 11: Reorganization Under the Bankruptcy Code
• Chapter 12: Family Farmer Bankruptcy or Family Fisherman Bankruptcy
• Chapter 13: Individual Debt Adjustment
• Chapter 15: Ancillary and Other Cross-Border Cases

As an individual or married couple, you are most likely to file Chapter 7 or Chapter 13 bankruptcy. While both chapters offer many of the same benefits, there are significant differences between what these two chapters offer and how they operate.

Bankruptcy is a complex area of law. When you hire our firm to represent you, we will strive to make the process as smooth as possible.

Considering Chapter 7 or Chapter 13 Bankruptcy

Chapter 7 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.

Filing for Chapter 7 bankruptcy is generally the quickest and simplest form of bankruptcy. In general it takes only four to six months to complete. Though, there are benefits that Chapter 13 offers that Chapter 7 does not. These benefits include an opportunity to make up missed mortgage payments, make up missed car payments, and to “lien strip” an underwater second mortgage.

Both Chapter 7 and 13 are powerful tools to get you out of debt. Both chapters also have the power to stop collection action against you, including harassing phone calls, wage garnishments, bank levies, and lawsuits for unpaid debts.

Learn More About How Bankruptcy Can Help You

When we meet for a free consultation we will go over the pros and cons of the various chapters and help you determine which chapter is best for you. Our goal is to ensure you understand the different chapters of bankruptcy and how filing will affect you and your family.

At the Law Offices 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.