Bankruptcy Chapters

Filing bankruptcy impacts every aspect of your finances. If you need to fund your child’s education, it is important to discuss the details with your bankruptcy attorney. Three common educational financing concerns during bankruptcy are: funding a 529 educational savings account, paying for private school tuition, and college loans.

Section 529 of the Internal Revenue Code makes special tax allowances for contributions to protected education accounts. These accounts are also protected from creditors (and from the trustee) during bankruptcy, but special rules apply. For instance, the beneficiary of the account must be your child, stepchild, grandchild, or step-grandchild. You cannot set up a 529 fund for yourself, then file bankruptcy and protect the money.

The timing of deposits into a 529 Plan will determine whether the money is protected. Deposits made within 365 prior to your bankruptcy filing are not protected at all. Deposits made between 365 days and 720 days prior to your bankruptcy filing are exempt up to $5,850 per beneficiary. Any deposit made over 720 days before filing bankruptcy is entirely exempt.

Private school tuition for elementary and secondary schools may or may not be allowed during a Chapter 13 bankruptcy.

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Tags: Bankruptcy

One of the major benefits of Chapter 13 Bankruptcy is the ability to avoid second mortgages that are not secured by any value in your home.  By following standards outlined in the Banrkuptcy Code, you can reclassify that loan on your home into the same category as credit cards or other ordinary bills and discharge them at the end of your Chapter 13 payment plan.  This is called lien stripping. You cannot do this to a mortgage in a Chapter 7 case.

However, if there is even a penny of value in the home that would go to a second mortgage when the property was sold, the loan cannot be valued as unsecured.  That means it must be paid during the Chapter 13 case and it also survives the Chapter 13 as a lien on the property until it s paid off.

So wheres the Time Bomb?  Lets assume that youve been dealing with your lender trying to work out a modification of your first mortgage.  Well, what if your lender were to give you a modification that reduces your principal balance?  That modification now results in a little equity in your home.  Sounds like good news, right?  Nope.  With th

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Tags: 13 Bankruptcy, Chapter 13, Chapter 13 Bankruptcy, Mortgage

Sometimes, when people file Las Vegas bankruptcies in Chapter 13, they have a lease that theyve defaulted on. If the term of the lease hasnt expired, then the petitioner might be able to assume the lease, that is, resume payments and maintain access to whatever theyre leasing. In most circumstances this is an apartment or a car. The Chapter 13 payment plan allows petitioners to assume defaulted leases, and the bankruptcy code elaborates on these rules in § 365. Here are the steps involved.

(1)  The bankruptcy code doesnt allow debtors to simply resume payment on the defaulted lease as though nothing has happened. They must either cure the default or at least convince courts that they will promptly cure the default.

(2)  If they can cure the default then and there, they must only convince the court that they will be able to make the future payments. More on that later.

(3)  If they cant cure the default immediately, debtors will have to convince the court that they will cure it. In practice, this usually means structuring the Chapter 13 payment plan to include extra payments to the lessor (the party debtors are leasing property from) over a period of time to cover the default. Onc

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Tags: Chapter, Chapter 13

Massachusetts Bankruptcy Court hearings are generally open to the public, Boston bankruptcy lawyers,debtors, creditors and occasionally the media. Transcripts of the proceedings are generally available as well. Some content is generally redacted, or excluded, such as “social security numbers, financial account numbers and minors’ names and birth dates.” In a May 2, 2011 decision by Bankruptcy Judge Henry J. Boroff, the Court was asked to look at the rules for allowing a portion of a public hearing to be redacted from the transcript of the bankruptcy court record.

In a Chapter 7 case that would not normally get this level of judicial attention, Verizon violated the rules of the Bankruptcy Court Automatic Stay. That is, after someone files for Chapter 7 bankruptcy protection, a creditor, such as Verizon, cannot continue to attempt to collect a debt from the debtor. All lawsuits are “stayed.” Creditors can file appropriate proceedings in the Bankruptcy Court, requesting a release from the automatic stay. This happens frequently in foreclosure cases, and sometimes in Massachusetts personal injury cases where insurance is involved.

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Tags: Bankruptcy Court, Massachusetts Bankruptcy, Massachusetts Bankruptcy Court, Transcript

There is an old saying, “A drowning man will grab even the edge of a sword.” For a homeowner drowning in debt, any assistance may seem beneficial. Unfortunately, there are scam artists that use a desperate situation to make a few quick bucks.

Case in point is an Austin, Texas, man who recently pled guilty to operating a foreclosure-rescue scam. Frederic Alan Gladle, 53, admitted that for four years he defrauded homeowners that netted him more than $1.6 million in fees. According to court documents, Gladle used different aliases and the stolen the identity of at least one person to set up a mobile phone number.

Gladle, who played linebacker on the University of Southern California’s 1978 national football championship team and is married to the 1984 Playboy Playmate of the Year, charged distressed homeowners fees in exchange for fraudulently postponing foreclosure sales. He faces two to seven years in prison.

In a statement released by the U.S. Department of Justice, “Gladle admitted that he recruited homeowners whose properties were in danger of imminent foreclosure and falsely promised to delay the foreclosures for up to six months, in exchange for a fee of approximately $750 per month. G

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Tags: Homeowner, Homeowner Fraud