Bankruptcy Q&A rapid fire

Time for rapid fire Bankruptcy Q&A again.

Subject: Chapter 7 waiting 8 years
QUESTION: I filed a Chapter 7 for just myself in 03/01, discharged in 07/01. I just filed today for a Joint Chapter 7 and found out I have to wait 8 years in between filing. Any exceptions or way to get around the waiting period? Thanks…

Nope, your case will be dismissed, or else you can move to convert your case to Chapter 13 which is allowed. That is a repayment plan.

———- FOLLOW-UP ———-

QUESTION: Thanks, that’s what I’ve found I could do. Too much past consumer debts to do Chapter 13. With my wife on the petition can it proceed and I withdraw my name from it? Thanks…

Ah, good point. You can bring a motion to dismiss yourself as a party and keep her in the chapter 7. That should be approved.

Subject: amendment to bankruptcy
Hi: I just went before the court yesterday, regarding my case. I need to amend it. How long do I have before it’s too late to file this amendment?

Answer: Normally, for chapter 7 you can amend up until the discharge, which will be approx. 60 days if you just had your hearing, but it is best to file them right away.

Subject: Mortgage Forbearance and Chapter 7
My husband and I are filing Chapter 7 but are going to keep our house. We are not behind on our payments but I am thinking of contacting our mortgage servicer to ask for a temporary forbearance. We have not filed ch 7 yet but will in the next month. If I make a temporary forbearance what effect does it have when we go to court?

Be careful, many times, the forbearance is accelerated once a bankruptcy case is filed. Otherwise, you need to stay current if there is no such provision. Be sure to advise the lender of your upcoming BK.

Subject: Chap 7 vs 13
I filed a chapter 7 in 05 did not include all my credit cards. Since then I have lost my job My husband did not file with me at the time. We have bills together now and can not make it .He lost his job also. Can we go back and file since I did individual in 05

Answer: You can only do chapter 7 every 8 years, so if you want to file, then Chapter 13 is your only available option. your husband can do chapter 7 if he has not filed in the last 8 years.

Subject: Bankruptcy 13-kicked out or quit
I have been in ch. 13 for 2yrs.What will happen if i let them dismiss my case? All my debt is unsecured.. Thanks.

Answer: The creditors can start to collect on the unpaid balances again.

Subject: 2nd mortgage
QUESTION: My second mortgage is my concern in bankruptcy.
The second mortgage has already been written off according all three credit bureaus. My house is barely worth the second mortgage much less the second second mortgage. How can I or what steps in my hearing Sept 30 2008 for chapter 7 can i take to be rid of this second mortgage?

The 2nd mortgage is a lien on your home, so it must be paid if you wish to keep your home. if you are surrendering the home in bankruptcy, they will be discharged, and would be paid out of any of the proceeds of the sale (if any).

———- FOLLOW-UP ———-

: My first mtg is ok and i want to keep the house. The second Mortgage has been written off prior to the bankruptcy by the other mortgage company. It still shows up on the credit bureaus as written off. What happens to the second Mortgage. Value of the house is $109000…owe $107000 or first mortgage and $46000 on the second mortgage
that was written off.

It is still a lien on your home, that clouds title in the event of transfer or sale.

Subject: income received after bankruptcy closed
if i file a chapter 7 bankruptcy, is it possible for any of the creditors included in that bankruptcy to reach income that i earn, inherit, or otherwise acquire after the bankruptcy closes? once my bankruptcy is final, i’d like to sell my long term disability policy and convert my monthly payments to a lump sum. thanks.

Answer: You have to disclose inheritances to the court for liquidation for 6 months after your case.
You can liquidate your assets after you are discharged to do what you want with them.

Subject: Tuition in Collections

I have an unpaid tuition bill that has been presented to collections for a semester in which I dropped out of school in 2005. The entire bill is $3538 – which includes $1974 in tuition fees $205 in tickets $474.50 in fees and $884.50 in collection cost – as of this point $116 has been collected from my state taxes leaving a balance of $3421.15 – My issue is – since my original balance of tuition and tickets cost is only $2180 – Question #1: Can I attempt to settle on the remaining fees/collection cost of $1360 – Question 2: Is there not a percentage in which I can only be charged up to on the fees/collection costs as they have charged me up to 62% of the original balance – Question 3: At this point is it best if I attempt to hire an lawyer to assist me in settling this debt and since the cost is so low is it feasible for me to believe a lawyer will attempt to assist me with this issue?

Answer: It would be best to negotiate with the lenders as Tuition and tickets are non-dischargeable in bankruptcy.
All interest and collection costs are also not discharged.
1. You can settle anything if you can get the lender to agree to it.
2. state and federal law may govern. I practice bankruptcy only and do not know.
3. your call. You can pay an attorney to negotiate for you, or you can try it your self. I’ve seen results both ways.
4. You shouldn’t give poor scores when you ask a bankruptcy attorney a non-bankruptcy set of questions. Please revise.

Subject: Withdrawl-401 K- while in Chapter 13

I was wondering if it would be possible to withdrawal my 401 K of $5,000 while I’m in Chapter 13..Just went to court on Thursday and already started making the chapter 13 payments? I qualify through the 401 K to withdrawal since I got laid off from my job. I’m going to open a home daycare and need the money to get it prepared…Do I need to ask the Trustee prior to doing so? Do they need to be informed? Will they take it if I withdraw it.

You don’t need to get permission in most cases, however, you may need permission if you need to modify your plan to afford payments, etc. So talk with your lawyer about the best plan of attack.

Subject: Ex husband had lien on house filed bankruptcy
My fiancées ex husband had a lien placed on the house from a creditor for a car payment that he didn’t pay it went on for years and ended up being a $27,000 lien placed on the property after she filed for divorce. In the divorce settlement he said that he would take care of the debt since it was his. After the divorce he filed bankruptcy and had the amount included in his bankruptcy but he got to keep the car that caused the lien, his attorney filed a stipulated order to redeem vehicle. He told his ex wife that he had the lien taken care of since the company settled with him. Recently she tried to refinance the house and found out that the lien was still on the property and would have to be paid from the refinance. Is there any recourse for her? Does she have to pay the lien?

Answer: She can enforce the divorce decree to have him pay it. She’ll have to do that thru the divorce court.

Subject: Will I be able to Keep my vehicle?
I filed for chapter 7 bankruptcy relief on Sep. 9, 2008. At the time that I filed, I was behind on a few payments to the finance company for my vehicle and requested reaffirmation. The finance company has filed to lift the stay. Will I be able to keep my vehicle?

Maybe. You need to bring the loan current, or have the loan re-written with the reaffirmation agreement. Otherwise, once the stay is lifted, they can repossess the car if they choose.

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Terrance Leeders

Chicago Bankruptcy Lawyer, husband, father, Cubs fan.

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