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The Law Office of Todd Cushner & Associates

What is the difference between Chapter 7 bankruptcy and chapter 13?

Chapter 7 bankruptcy is a type of liquidation bankruptcy that is designed to discharge most unsecured debts, while Chapter 13 bankruptcy is a type of reorganization bankruptcy that allows you to repay your debts over a period of three to five years. In Chapter 7, a court-appointed trustee liquidates any non-exempt assets to pay off creditors, while in Chapter 13, you create a repayment plan to pay off your debts over time. The eligibility requirements and types of debts that can be discharged also differ between the two types of bankruptcy.

If I file for Bankruptcy, will I lose my car?

Whether or not you will lose your car if you file for bankruptcy depends on the type of bankruptcy you file, the value of your car, and whether you are current on your car payments. In Chapter 7 bankruptcy, if your car is not exempt, the trustee can sell it to pay off your creditors. However, if you are current on your car payments and can continue to make payments, you may be able to keep your car.

In Chapter 13 bankruptcy, you can usually keep your car as long as you continue to make your regular car payments and include any past-due payments in your repayment plan. It’s important to consult with a bankruptcy attorney to understand your options and develop a strategy that best suits your individual circumstances.

Can I discharge My student Loans if I File for Bankruptcy?

Discharging student loans in bankruptcy is generally difficult, but not impossible. To discharge student loans in bankruptcy, you must prove that repaying the loans would cause an undue hardship on you and your dependents. This is a difficult standard to meet and requires a separate lawsuit known as an “adversary proceeding.” To determine whether your student loans can be discharged, the court will apply a three-part test known as the Brunner test. This test requires you to show that you have made a good faith effort to repay the loans, that you cannot maintain a minimal standard of living while repaying the loans, and that your financial situation is unlikely to improve in the future.

It’s important to consult with a bankruptcy attorney to determine your specific options for discharging student loans in bankruptcy.

Are My Unpaid Taxes Dischargeable when Filing for Bankruptcy?

Unpaid taxes may be dischargeable in bankruptcy under certain circumstances. In Chapter 7 bankruptcy, income tax debts may be dischargeable if they meet certain criteria, such as being at least three years old and having been filed on time. However, other taxes, such as payroll taxes or fraudulent tax returns, are not dischargeable. In Chapter 13 bankruptcy, taxes can be included in your repayment plan and paid off over three to five years. It’s important to consult with a bankruptcy attorney to understand the specific rules and requirements for discharging unpaid taxes in bankruptcy.

I’m behind on my mortgage if  I file for Bankruptcy to help me catch back up. Filing for bankruptcy can help you catch up on your mortgage payments if you file for Chapter 13 bankruptcy. In Chapter 13, you can include your past-due mortgage payments in your repayment plan and pay them off over three to five years. This allows you to keep your home and catch up on missed payments without facing foreclosure. However, you must also make your ongoing mortgage payments on time during the repayment plan. It’s important to consult with a bankruptcy attorney to understand your options for catching up on mortgage payments and developing a strategy that best suits your individual circumstances.

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