Charlotte Attorney's Informative Blog

CHAPTER 13 BANKRUPTCY

DEFINING CHAPTER 13

Chapter 13 is one of two kinds of consumer bankruptcy, the other being Chapter 7. Unlike Chapter 7, there is no automatic discharge within months of filing. Chapter 13 involves the debtor committing to a debt repayment plan. The entire process takes anywhere from three (3) to five (5) years to complete. Chapter 13 involves restructuring certain debts, by modifying the terms and amount of those debts.

QUALIFYING FOR CHAPTER 13

Chapter 13 is often referred to as the wage earner’s bankruptcy. Often times, debtors who fail the Chapter 7 means test, will often times qualify for Chapter 13. To qualify for Chapter 13 the debtor must show that they have income to pay off most of their debts during the bankruptcy. The debtors total unsecured debts must be less than $360,475 and the total secured debts must also be less than $1,081,400.

CHAPTER 13 PROCESS

Once it is determined the debtor qualifies for Chapter 13, their Attorney prepares a Chapter 13 Petition which includes statements and schedules. These statements and schedules contain information on the debtors income, expenses, assets, and debts. In addition, the debtors Attorney prepares a Chapter 13 plan. The Chapter 13 plan must propose to pay off most of the debtors for the duration of the bankruptcy. The plan must take into account the debtors disposable income remaining after all necessary expenses are paid. The plan may can modify the terms of mortgages and car loans. The debtor can also make a motion to the court to have certain debts reduced based on the value of the property it secures. The debtors primary mortgage and any arrearages are paid directly to the Bankruptcy Trustee, this is called a Plan Payment. The trustee collects an administrative fee for collecting this payment and distributing it to the creditors. All other debts are paid according to the plan directly by the debtor for the remainder of the bankruptcy. The Bankruptcy Trustee must review and approve the plan before it can be confirmed. Similar to a Chapter 7, the debtor must attend a 341 Meeting where there the debtor affirms they have read and approved the bankruptcy petition and plan.

YOUR ASSETS IN CHAPTER 13

This is where Chapter 7 and Chapter 13 differ. The trustee is not concerned with non-exempt property in a Chapter 13 case. Unlike a Chapter 7, the debtors assets are not sold or liquidated to pay of creditors in a Chapter 13 Bankruptcy. The debtor in a Chapter 13 is making a commitment to pay these debts off during the duration of the bankruptcy, which will last anywhere from three to five years.

FINDING THE RIGHT CHAPTER 13 ATTORNEY

Chapter 13 is extremely complicated so you need to make sure you hire an Attorney who has experience filing Chapter 13 Bankruptcies. It involves a lot more steps and is much more extensive process. A paralegal or legal site can possibly prepare your petition, but they will not be able to attend the 341 meeting or assist you with the modifications to the plan or motions. Chapter 13 Plans are specific to not only the state in which you file, but also the district. The Bankruptcy Trustee often times will request the plan be modified several times, before it is approved. Filing Chapter 13 is not a simple process and requires the requisite amount of expertise and knowledge of bankruptcy laws and procedures in your region. Maxwell Law Firm, PLLC assists debtors for filing for Chapter 13 in the Western and Middle Districts of North Carolina. Discounts are applied to the fees automatically when you scheduling your appointment online. The Law Offices of Chirnese L. Liverpool assists debtors filing for Chapter 7 Bankruptcy in California. You may contact them by calling 818-714-2200

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PROCESS OF FILING FOR BANKRUPTCY: 341 MEETING

BY Maxwell Law Firm

When it comes time to formally file for bankruptcy, you will need to participate in a 341 creditor meeting. Many people find themselves intimidated merely by the thought of it, but the process is not scary or negative in most instances. Instead of a grand inquisition, most individuals facing bankruptcy find that a meeting of the creditors to be simple and helpful.
Although it is called a 341 creditor meeting, there are rarely any creditors physically in attendance. But even though the creditors may not attend the meeting, their presence in known and they are capable of calling future actions once the proceedings have entered the court of law.
However, just because the creditors do not have to be in attendance does not mean that it isn’t critical for the debtor to be in attendance with his or her lawyer (if applicable). The meeting is presided over by a bankruptcy trustee (there will not be a judge in attendance).
This individual will work to ensure that both sides have the correct facts available to them when it comes time to file for bankruptcy in a court of law (but ultimately, the trustee represents the creditors). Additionally, the trustee is appointed to the meeting by the court and has the authority to swear in the debtor.
The 341 creditor meeting is held anywhere from 20 to 40 days after you file for the bankruptcy petition. This meeting is necessary for anyone filing for a Chapter 13 or Chapter 7 bankruptcy.
You are strongly encouraged to seek professional legal representation by a bankruptcy attorney. This is especially true in cases that are complicated, since a lawyer will be able to help you muddle through the legal information to ensure that you are on the right path at all times. If you choose not to enlist a lawyer in your bankruptcy proceedings, you will be representing yourself in the 341 meeting.
During a 341 creditor meeting (More information on what to expect at a 341 meeting), the trustee will first swear you in and then begin the meeting. These meetings are usually short and informal, requiring little more than a prepared statement from you.
This statement should state the reason why you are filing for bankruptcy in addition to a list of all of your debts. After the statement has been read, the creditors are able to ask questions. Since few creditors even attend these meetings you won’t likely be presented with many questions to answer.
After hearing the information in your statement, the creditors are then able to submit any challenges regarding the debts listed in your statement. Although most creditors will not submit any challenges, you may have debts listed that fall in the space between the dischargeable and non-dischargeable categories (see discharging debts).
In the end, a 341 creditor meeting is not meant to embarrass or anger you. The purpose of the meeting is to find all the facts before the case appears before a judge in a court of law.

If you are looking for a  Foreclosure Defense Firm and or a Bankruptcy Attorney in
in North Carolina Please Call Maxwell Law Firm, PLLC
at 704-461-1883 or contact us here

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Bankruptcy and Short Sales in North Carolina

BY Maxwell Law Firm

Every week we get clients filing for bankruptcy protection asking questions whether they should proceed with a short sale on their real estate. If you are filing for BANKRUPTCY, then you do not need to proceed with a short sale.

Lets first define what a short sale is. A short sale is a sale approval by the lender to receive less than the full amount of their loan, very common now in this depressed real estate market. For example: you bought a home in 2007 for $250,000 with a first mortgage of $250,000 and second mortgage of $50,000. The property is now worth $200,000 and you have a buyer willing to close escrow in 30 days for $200,000. If the first mortgage agrees with the sale, they will receive about $50,000 less than their current debt and the second will receive $0.Typically the second signs off with a nominal payment such as $5,000.00.

The short sale then triggers a host of problems that the borrower does not discovery until later. But if you are filing bankruptcy, there is usually no reason for the short sale. In fact, the short sale generally hurts more than helps for at least five reasons.

First, the short sale triggers a taxable event and allows the lender to issue a 1099-A or 1099-C. This is sent to the IRS and essentially states that you received income that you now need to pay taxes on. In the forgoing example, you would then need to pay taxes on $100,000 of income. There is one exception to this rule and you must qualify fot this.
Second, it will damage your credit. Since you are breaching the contract, the lender has the right to report that you did not pay the balance in full. It is has almost the same effect your credit report as a foreclosure, and a short sale is usually far worse on credit reports than any bankruptcy filing. This can lower your credit score by as much as 200 points!!!

Then, there may be no need to do the short sales, since the lender probably has no other recourse against you since the loan was purchase money or will foreclose non-judicially, the short sale is not changing any liability issues. That means they can still sue you for the difference on the note.

Also, you are wasting your time and money. The only party really benefiting here is the realtor and buyer. Since all the work, worries, and monies you provide do not benefit you at all, the entire short sale process is usually done in vain. Instead, the realtor gets a fat commission at your expense. Instead you could be spending less than $1500 for a bankruptcy ( this includes the filing fee) to take care of this debt and others in a Chapter 7 Bankruptcy.

Lastly, you will be losing time in your property. Since the typical foreclosure process can usually last over a year when a bankruptcy is filed, you may be losing a substantial amount of equity recoupment or rents. If your mortgage is $2000 per month and you short sale now as oppose to allow foreclosure a year from now, you lose about $24,000.
Instead, it is usually best to surrender the home after the bankruptcy is filed. Under bankruptcy laws, there is no taxable event on a foreclosure after bankruptcy (except possibly a capital gain in rare cases in today’s economy), the lender can not report to credit bureaus foreclosure but can only report “$0.00 balance, bankruptcy discharge”(which by the way gets reported in all bankruptcy cases whether you keep the home or not and is generally better than foreclosure or short sale in terms of effecting your credit score), the debt is finalized as non- recourse, you avoid wasting your time and money, and you are able to stay in the property or rent it out longer.

Thus, at least in North Carolina, it is advisable in almost every case to avoid a short sale if a bankruptcy case is being filed. If you are currently in a short sale process and your bankruptcy has not been filed yet, you may want to get out asap. To the extent any buyer or realtor tells you you can not, simply list them as a creditor in your case and any claims they have will then be discharged as well.

If you are looking for a  Foreclosure Defense Firm and or a Bankruptcy Attorney in North Carolina Please Call Maxwell Law Firm, PLLC
at 704-461-1883 or contact us here

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REASON # 2 HIGH CREDIT BALANCES ON NUMEROUS CARDS

BY Maxwell Law Firm

Your credit score is like a numeric grade that’s applied to your credit history at a specific point in time. The credit score is based on the information that’s listed in your credit report. Your credit report includes information about your credit cards and loans. Things like the account balance, payment history, credit limit, and age of the account are listed on your credit report. The credit score is calculated based on a formula that gives weight to different parts of your credit history.

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By Tom Quinn

Question: The value of my home has gone way down and is now worth less than what I owe. A friend is recommending I do a short sale saying it won’t hurt my credit score as much as a foreclosure. Is that true?

It’s not surprising this question comes up quite often considering that over 11 million households (23 percent of all mortgaged homes), were underwater in the Oct-Dec 2010 quarter according to a report released by Corelogic. With so many consumers evaluating their options, it’s important to understand the difference between a short sale and a foreclosure, and how each option may impact your credit scores.

So, what’s the difference between a short sale and a foreclosure? Simply put, a short sale occurs when the lender agrees to accept less than the total amount owed on the mortgage loan. A foreclosure on the other hand, is the legal termination of all rights of the borrower as the owner of the home and the lender in essence repossesses the home. In a foreclosure, the estate becomes the absolute property of the lending institution.

The presence of either a foreclosure or short sale on a credit report is considered negative by credit scores because it is predictive of future credit risk. Generally speaking, the impact on the score will be similar for both a foreclosure and a short sale.

The exact score impact of a foreclosure or a short sale will depend on several factors:

• Any additional information being reported on the mortgage account being included in a foreclosure or short sale. (For example, any late payments associated with said mortgage account prior to the foreclosure or short sale and how recently those past due payments took place.)

• The current credit profile of the consumer. How the consumer is managing all their other credit obligations (credit cards, car loans, student loan, etc.) Are these other bills being paid on time or have missed payment been reported on these as well? Are credit cards showing high balances?

The negative impact on a credit score appears more severe if a foreclosure or short sale is reported on a credit report that has little or no history of missed payments and/or derogatory information, and has low balances on active credit accounts. In these scenarios, the number of points lost can be 150 or greater. The impact may be less noticeable if there are any indications of high-risk behavior (missed payments, etc.) already being reported in the credit report. This is because the negative history is already impacting the credit score which will be lower as a result, reflecting that higher risk behavior.

The perception that a short sale will always have less impact on a credit score compared to a foreclosure is simply a credit score myth.

Bottom line, the score considers both items to be negative, high-risk behaviors, so both options will have a negative impact on the score.

Read more: http://www.credit.com/blog/2011/04/credit-qa-short-sales-foreclosures-and-your-credit-score/#ixzz1J9yhJtWE

If you are in danger of foreclosure, bankruptcy maybe the best option for you. It is a good idea discuss bankruptcy and all your options with an Attorney.  There is life after bankruptcy at most of the time its much more hopeful than before.

Maxwell Law Firm is a Bankruptcy Law Firm in Charlotte North Carolina

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by small business trends

Washington, D.C. (PRESS RELEASE – April 8, 2011) – Small businesses that have previously filed for bankruptcy are no more burdened than other small firms by poor cash flow, high health insurance costs, or excessive taxes, and they attain similar firm sizes, according to a study released by the U.S. Small Business Administration’s Office of Advocacy. However, they have about a 24 percent higher likelihood of being denied a loan and are charged interest rates at least 1 percent higher than other firms. The report finds that firms owned by African and Latino Americans are even more likely to be denied loans and charged higher interest rates.

“Small businesses filing for bankruptcy have an opportunity for a new start. This new start is hampered by the challenges of obtaining new loans. This can impede innovation and job creation,” said Chief Counsel for Advocacy Winslow Sargeant.

The study, Beyond Bankruptcy: Does the Bankruptcy Code Provide A Fresh Start to Entrepreneurs? by Aparna Mathur, finds that owners of 2.6 percent of firms have filed for bankruptcy at some point in the previous seven years. Credit rationing of previously bankrupt firms leads to a class of discouraged borrowers who are significantly less likely even to apply for a loan, according to the study.

The research relies on data from the National Survey of Small Business Finances as a basis for the analysis. Surveys were conducted by the Federal Reserve Board in 1993, 1998, and 2003.

About the Office of Advocacy, Small Business Administration

The Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government.  The presidentially appointed Chief Counsel for Advocacy advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policymakers.

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We can assist with foreclosure help now, debt settlement, bankruptcy filing, wage garnishment, irs debt collection. We have a simple questionnaire that helps to evaluate your unique financial situation. Go here to fill out the Questionnaire
Schedule your consultation today
Contact Maxwell Law Firm, PLLC
704-461-1883 Filing bankruptcy in north Carolina,

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Notary Public & Loan Signer & Attorney (Charlotte/Concord/Gastonia/Salisbury/Monroe/Indian Trail)
Charlotte Notary Public Service offering Notary Public and Loan Documents.
Signing Services to Mortgage Lenders, Brokers, Title and Escrow Companies, Attorneys, and for all other Private Party business transactions.
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