Bankruptcy Basics - Part 2: Types of Bankruptcy

Bankruptcy Basics - Part 2: Types of Bankruptcy
For Help with Chapter 7 Bankruptcy, Contact the Haveman Law Office today

For a Free Consultation and advise for your particular circumstances, contact the Haveman Law Office today, either online or at 616-499-7045

**we are a debt relief agency, helping individuals find relief using the United States Bankruptcy Laws**

Foreclosure Help

Foreclosure prevention

Alex Doty - Grand Haven Tribune

Residents faced with foreclosure have another lifeline to turn to, local housing experts say.
Grand Haven Housing Coordinator Char Seise said the Step Forward Michigan program has nearly $490 million available to assist homeowners in the state who are struggling.

“It’s a lot of money that needs to be spent,” Seise said. “We’re trying to get the word out that it exists.”
The program is made possible through funding from the U.S. Treasury’s Hardest Hit Funds program to develop a statewide strategy aimed at helping homeowners who are at high risk of default or foreclosure.
Seise said the program consist mainly of two parts: one for people who are unemployed and one for people who have fallen behind on their mortgage payments.

Read Rest of Article

www.stepforwardmichigan.org

For help with Chapter 13 to save your home For Advice for your particular situation visit us at www.haveman-law.com or call (616)499-7045 for a free consultation

For a Free Consultation and advise for your particular circumstances, contact the Haveman Law Office today, either online or at 616-499-7045

**we are a debt relief agency, helping individuals find relief using the United States Bankruptcy Laws**

Ever Wondered How Your Credit Score is Calculated? How You Compare?

See:

The Average Credit Report and Score in America | DirectLendingSolutions.com

For a free consultation and advise for your particular circumstances, contact the Haveman Law Office today either online or at 616-499-7045

**we are a debt relief agency, helping individuals find relief using the United States Bankruptcy Laws**

What Happens to Your Car in Chapter 7 Bankruptcy?

What Happens to Your Car in Chapter 7 Bankruptcy?

Republished with Permission © 2011 Nolo.

by Attorney Stephen R. Elias

Chapter 7 bankruptcy allows you to keep or surrender your car or truck.

People often wonder how Chapter 7 bankruptcy will affect their ability to keep their car. If you aren't making payments on a car, then you'll be able to keep it if its value falls under your state's vehicle exemption amount. However, if you are making payments on your car, it's not so simple. During your bankruptcy, you'll need to decide whether you want to surrender the vehicle or keep it by continuing to make payments. You let the bankruptcy court know what you want to do by filing an official form called the Statement of Intention (SOI) with your other bankruptcy papers, as well as mailing a separate copy of the SOI to your vehicle lender. Similarly, if you are leasing your car, you can either reject the lease on your SOI or can keep the car by assuming the lease.

Walking Away From the Car

If you want to walk away from the car, you list the lender on your SOI and state that you intend to surrender the vehicle -- that is, turn it in to the lender. This will clear you of any further liability on the debt after your bankruptcy. If you are leasing your car, you can get out of the lease by rejecting the lease on your SOI.

Keeping a Car You're Still Paying For

If you want to keep a car you are making payments on, no matter what else is going on in your bankruptcy, you should continue to make your payments as scheduled. You do have a choice, however, on how to keep the car: You can either pay the lender a lump sum to purchase the car at its current value (called redemption ), or enter into a new contract (called a reaffirmation agreement), which lets you keep your car under much the same terms as your original car's promissory note (although this is negotiable).
Sometimes your lender will let you keep the car without entering into a reaffirmation agreement, by simply allowing you to continue to make the payments under the old agreement (this is called the ride-through option). If your lender has been accepting your payments, it's a sign that you may be able to retain the vehicle and continue making payments without entering into a new reaffirmation agreement.

Negotiating With the Lender to Keep the Car

To find out whether your lender will require a new contract, call them and ask for the bankruptcy or loss mitigation department. Explain that you intend to file for bankruptcy and ask whether you need to reaffirm the promissory note or can instead retain the car and continue making payments without reaffirming.
If the lender agrees to let you retain the car and pay according to the old agreement, the lender will still have a lien and can repossess the car if you default on your payments. But if the car is repossessed (or if you decide to give it back), you won't have to worry about still owing a deficiency on the car (the amount of the loan minus what the lender can sell the car for) -- that will be wiped out after your bankruptcy case is over.
If the lender requires you to reaffirm the promissory note and you do reaffirm it, consider carefully whether you want to do this. The lender will have a right to repossess the car if you default on your payments and you will owe any deficiency that remains on your loan if that happens. If you want to reaffirm your loan, you'll take the following steps.

Negotiate the Reaffirmation Agreement

First, you'll state on your Statement of Intention that you intend to reaffirm the promissory note. Then, the lender will send you an agreement setting out the same or similar terms as your old agreement. At this point you should consider negotiating the terms more to your advantage. You do have some leverage here, because the lender knows that bankruptcy gives you the option of surrendering the car and canceling all liability. Lenders lose a lot of money on repossessions, so they have an incentive to cut you a better deal, such as reducing the principal of the loan to the car's current value. Don't be afraid to attempt to negotiate for this. All the lender can do is say "No." If the lender does say "No," you may want to consider surrendering the car at this point, and let the bankruptcy erase your liability for the remaining payments on the loan.

Have the Court Review the Reaffirmation Agreement

Once you and the lender have agreed on the terms of the reaffirmation agreement, you'll sign the agreement and file it with the court. At the "discharge hearing," near the end of your bankruptcy, the judge will decide whether the agreement should be enforced. After considering your income, the amount you owe on the car, and its value, the judge may decide that the reaffirmation will create an undue hardship for you or be against your best interests. If you still owe much more than the car's value, a judge might disallow the reaffirmation.

What Happens If the Judge Approves the Reaffirmation

If the judge approves the reaffirmation agreement, you will continue to be liable under its terms after your bankruptcy ends. For instance, if you have to give the car back due to a loss of income, at a time when you owe $25,000 under the agreement and your car is worth only $10,000, you'll be on the hook for the $15,000 deficiency. Remember that because you can't file another Chapter 7 bankruptcy for eight years, you could be back where you started before you filed for bankruptcy (another reason why a judge might not approve the reaffirmation in the first place).

What Happens If the Judge Disapproves the Reaffirmation

If the judge disapproves the reaffirmation agreement, you don't necessarily lose the car. According to several bankruptcy court opinions, you can keep the car as long as you remain current on your payments. These courts reason that as long as you do what is required of you by the bankruptcy code (state your intention to reaffirm, sign and file the reaffirmation agreement, and attend the discharge hearing), the fact that judge disapproves the agreement is beyond your control and should not result in your having to give up your car. All of this is conditioned, of course, on staying current on your payments. (See In re Moustafi, 371 Bankruptcy Reporter 434 (Bankr Ariz 2007).) You can read this case at www.georgiabankruptcyblog.com/moustafi.pdf. Paradoxically, if the judge disapproves the agreement, you will probably be better off, because you will be left with the practical equivalent of the ride-through option, meaning that you won't owe a deficiency should the car have to be surrendered or repossessed.

For a Free Consultation and advise for your particular circumstances, contact the Haveman Law Office today, either online or at 616-499-7045

**we are a debt relief agency, helping individuals find relief using the United States Bankruptcy Laws**

Can we get a home loan if my husband has a past bankruptcy?

Republished with Permission © 2011 Nolo.

QUESTION:
My husband and I are trying to prequalify for a home loan. He was married once before and filed for bankruptcy; this was over eight years ago, but it still shows up. We have also paid off a lot of old debt, but it still appears on our credit report as not paid. What can we do to set the record straight?

ANSWER:
It's time that you and your mate took active steps to clean up your credit file so it correctly shows the bills you've paid off. If you haven't already done so, complete the "request for reinvestigation" form that's included with your credit report, or write a letter to the credit bureau listing and requesting removal or reinvestigation of the incorrect and old information.
If the bureau doesn't respond within 30 days, send a follow-up letter requesting that they remove the disputed information. If the bureau claims the information is accurate, contact the creditors directly. If the creditor agrees that the bills are paid off, get it in writing. Then, send this letter to the credit bureau. Or, provide the name and phone number of the creditor to the bureau so it can call and verify the information. If the creditor won't assist you, call the credit bureau customer service number and ask for help. Once your file is current, try again to prequalify for a mortgage.
Because you're dealing with a number of complications, it would probably be best for you to work with a mortgage broker. You should be able to find a mortgage for which you can qualify, but don't bank on finding the best terms -- you may need to make a 20% to 25% down payment, pay high points, pay higher than average interest, or even get a cosigner.

for more information visit us at www.havemanlaw.com 

The Bankruptcy Means Test: Is Your Income Low Enough for Chapter 7 Bankruptcy?
 Republished with Permission © 2011 Nolo.

for help with chapter 7 or 13 call us at 616-499-7045 or visit www.havemanlaw.com

A means test calculator can determine whether you qualify for Chapter 7 bankruptcy -- try one online.

The "means test" is a formula designed to keep filers with higher incomes from filing for Chapter 7 bankruptcy. Only bankruptcy filers with primarily consumer debts, not business debts, need to take the means test. High income filers who fail the means test may use Chapter 13 bankruptcy to repay a portion of their debts, but may not use Chapter 7 bankruptcy to wipe out their debts altogether.
However, having to take the Chapter 7 means test doesn't mean that you must be penniless in order to use Chapter 7 bankruptcy. You can earn significant monthly income and still qualify for Chapter 7 bankruptcy if you have a lot of expenses, such as a high mortgage payment. This article shows you simple ways to determine whether you can pass the means test -- and, therefore, use Chapter 7 -- if you were to file for bankruptcy.

How Does the Chapter 7 Means Test Work?

The means test was designed to limit the use of Chapter 7 bankruptcy to those who truly can't pay their debts. It does this by deducting specific monthly expenses from your "current monthly income" (your average income over the six calendar months before you file for bankruptcy) to arrive at your monthly "disposable income." The higher your disposable income, the more likely you won’t be allowed to use Chapter 7 bankruptcy.
To take the means test, you must first determine whether your income is more or less than the median income in your state. If you earn more than the median, you must figure out whether you would have enough left over, after subtracting certain expenses, to repay some of your debt.

Is Your Income More Than the Median?

The first step is simple: If your current monthly income is less than the median income for a household of your size in for your state, you pass. Period. You're done. You do not need to complete the rest of the means test. You can file for Chapter 7.

Do You Have Enough Disposable Income to Repay Some Debts?

For those whose household income exceeds the state median, the means test computations get significantly more complex. You must determine whether you have enough income left over (called "disposable income"), after paying your "allowed" monthly expenses, to pay off at least a portion of your unsecured debts (such as credit card bills). If your disposable income adds up to more than a certain amount, you fail the means test and cannot file for Chapter 7 bankruptcy.
Median income levels vary by state and household size, and each county and metropolitan region has different allowed amounts for categories of expenses: basic necessities, housing, and transportation. But don't worry: You can get through the math with the help of an online calculator.

Use a Chapter 7 Means Test Online Calculator

If you're looking for an easy way to determine your eligibility under the Chapter 7 means test, use our online means test calculator, created by the author of Nolo's book How to File for Chapter 7 Bankruptcy, Albin Renauer, J.D. Once you enter your zip code, the calculator uses the applicable income and expense standards for your state, county, and region to determine your eligibility.
You’ll have to supply some income and expense information, but the calculator will save you the trouble of looking up income and expense figures for your area and doing the math. And, if you decide to file for Chapter7 bankruptcy, you can use these figures on your official paperwork (the calculator closely follows the format of the means test form, Official Form 22A, that you must complete when you file for bankruptcy).

If You Pass the Chapter 7 Means Test

Just because you qualify under the means test does not necessarily mean you should file for Chapter 7 bankruptcy -- merely that you can. Any decision to file for Chapter 7 bankruptcy should be made only after considering alternatives and other factors discussed in other articles on this website or in Nolo's The New Bankruptcy: Will It Work for You?, by Attorney Stephen Elias.
Once you've made your decision to go ahead and file for Chapter 7 bankruptcy, Nolo's book How to File for Chapter 7 Bankruptcy, by Stephen Elias, Albin Renauer, and Robin Leonard, can walk you step by step through the filing process.

If You Don't Pass the Chapter 7 Means Test

If you don’t pass the means test, you are limited to using Chapter 13 bankruptcy, which requires you to make monthly payments over a five-year period according to a strict budget monitored by the court. Most people who file for bankruptcy prefer Chapter 7, which requires no repayment. However, Chapter 13 bankruptcy is still the best way to handle specific types of problems, like curing a default on a mortgage. (See Reasons to Use Chapter 13 Bankruptcy Instead of Chapter 7 Bankruptcy.)
see Nolo's Chapter 13 Bankruptcy: Repay Your Debts, by Stephen Elias and Robin Leonard.

For Advice for your particular situation visit us at www.haveman-law.com
or call (616)499-7045

How do I improve my credit position after bankruptcy?

How do I improve my credit position after bankruptcy?

Republished with Permission © 2011 Nolo.

QUESTION:
I filed for Chapter 7 bankruptcy seven years ago. I've been told that it takes ten years for a Chapter 7 to "fall off" your record. Is there anything I can do in the meantime to get a lower rate on my car loan and credit cards?
ANSWER:
There are many things you can do to improve your credit. First, get a copy of your credit report and make sure it's accurate. To get lower interest rates, ask your lenders. Your bankruptcy is old enough now that it should carry less weight than it did a few years ago. If you have been making your car and credit card payments on time and your recent credit looks good, your creditors may very well lower the rate.
You might also contact your bank and ask whether you can obtain a personal loan with a lower interest rate than your car loan. Use the money from the bank loan to pay off the car loan. You'll still have to pay the bank loan, of course, but at least you'll have a better interest rate.

Can the bank take my car after I file for Chapter 13 bankruptcy?

Can the bank take my car after I file for Chapter 13 bankruptcy? 
Republished with Permission © 2011 Nolo. 

QUESTION: I filed a Chapter 13 bankruptcy and have already started paying the court. I sent a payment to the bank for a note owed on my van, but the check was returned. They then came and picked up the van. My work material was in the van along with personal items -- and we have not yet been notified as to where they are. What legal recourse do we have against the bank? 

ANSWER: When you're trying to get back on your feet, it seems especially unfair to have the rug tugged. If payment to the bank was spelled out in your plan -- either outside of bankruptcy or within -- then the bank's action violates a court order, the confirmed plan. Sadly, your recourse is to invoke the slow grinding wheels of justice and sue the bank, within your bankruptcy case. Talk to your bankruptcy attorney about this.