July 2016 Archives

Losing Security Deposits when a Landlord Files Bankruptcy

Issues can arise when your landlord files bankruptcy such as what happened when a Northeast Philadelphia owner of multiple properties filed bankruptcy. http://www.philadelinquency.com/2015/12/31/what-do-you-do-when-your-landlord-is-bankrupt/  Generally, if the landlord filed a chapter 7 bankruptcy and is no longer going to operate the apartment building and you move, there may be an issue relating to getting your security deposit back. The landlord should have put the money in a separate account which would protect your money from the landlord's other creditors. However, all too often, the money is not segregated.  In that event, it is less likely that you will get your deposit back. However, all is not lost. A deposit creditor is given a higher priority then general unsecured creditors so even if the landlord does not have enough assets to result in full payment to creditors, the tenant is ahead of a lot of creditors with any distribution. Of course if there are no funds, then the deposit is lost. 

Waiting Periods for Multiple Bankruptcy Filings

The type of bankruptcy initially filed where a discharge is received is a determining factor in the number of years that must pass before a debtor can refile for bankruptcy and again receive a discharge. Whether living in towns such as Moorestown, New Jersey or Northeast Philadelphia, Pennsylvania the rules relating to obtaining a bankruptcy discharge in a second bankruptcy are the same. 

Chapter 7 Bankruptcy Eligibility as Determined by the Means Test

The bankruptcy means test is a significant factor in determining who can file for debt forgiveness through Chapter 7 bankruptcy. See  http://www.csmonitor.com/Business/Saving-Money/2016/0718/Why-the-bankruptcy-means-test-matters. It takes into account your income, expenses and family size as well as the state you live in to determine whether you can eliminate the debt or whether you have enough disposable income to repay some or all of your debts. Regarding the relevance of the state you live in, as an example, a family of four residing in Northeast Philadelphia Pennsylvania will need to have less income than a family of four residing in Pennsauken New Jersey because the statewide income is less in Pennsylvania then in New Jersey.

Student Loan Debt Relief in Bankruptcy

As a general rule, student loans are not discharged in bankruptcy. However, 'Undue hardship' allows bankruptcy judges to forgive student loan debt when filing for personal bankruptcy.  Congress has never defined 'undue hardship' in the Bankruptcy Code.  Case law indicates that 'Undue hardship' requires a three-part showing: (1) that the debtor cannot maintain, based on current income and expenses, a 'minimal' standard of living for herself and her dependents if forced to repay the loans; (2) that additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and (3) that the debtor has made good faith efforts to repay the loans. 

Negotiating Mortgage Interest Rate Reductions and Credit Term Extensions with Banks

Divorce, loss of income and illness have caused a number of homeowners in Cherry Hill, NJ, Mount Laurel, NJ and other New jersey towns to fall behind with their mortgage. Filing a Chapter 13 bankruptcy to pay missed mortgage payments over time is not the only option to keep your home. Mortgage modification provides another vehicle. With a mortgage modification, you or your representative negotiate with your bank to reduce the mortgage interest rate and to extend mortgage credit terms. Hiring an attorney to negotiate a mortgage modification can save you money and allow you to keep your home.

When You File Bankruptcy, You Can Stop Repossession

Creditors may try to repossess your car, truck or your motor home if you are behind in payments. Filing for bankruptcy will stop asset repossession. If you file bankruptcy, creditors cannot repossess assets such as a car. If you are behind with your payments, you can pay the missed payments over time through a chapter 13 bankruptcy and resume your regular payments. An alternatvie which may provide you with lower payments would be to pay the entire car balance plus interest through the bankruptcy plan. If the car was purchased more than two and one half years before the bankruptcy was filed, you may be able to save even more money by cramming down the value of the car. In other word, if you owe $20,000.00 on a car worth $14,000.00, you can propose to pay $14,000.00 plus interest through the plan which result in substantial savings. 

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